The hairy root culture of Lippia dulcis Trev., Verbenaceae, was established by transformation with Agrobacterium rhizogenes A4. The transformed roots grew well in Murashige and Skoog medium containing 2% sucrose. The roots turned light green when they were cultured under 16 h/day light. The green hairy roots produced the sweet sesquiterpene hernandulcin (ca. 0.25 mg/g dry wt) together with 20 other mono- and sesquiterpenes, while no terpenes were detected in the nontransformed root cultures. The growth and hernandulcin production in the hairy root cultures were influenced by the addition of auxins to the medium. The addition of a low concentration of chitosan (0.2 - 10.0 mg / l) enhanced the production of hernandulcin 5-fold.