Host cell engineering is becoming a realistic option in whole bioprocess strategies to maximize product manufacturability. High molecular weight (MW) genomic DNA currently hinders bioprocessing of Escherichia coli by causing viscosity in homogenate feedstocks. We previously showed that co-expressing Staphylococcal nuclease and human Fab' fragment in the periplasm of E. coli enables auto-hydrolysis of genomic DNA upon cell disruption, with a consequent reduction in feedstock viscosity and improvement in clarification performance. Here we report the impact of periplasmic nuclease expression on stability of DNA and Fab' fragment in homogenates, host-strain growth kinetics, cell integrity at harvest and Fab' fragment productivity. Nuclease and Fab' plasmids were shown to exert comparable levels of growth burden on the host W3110 E. coli strain. Nuclease co-expression did not compromise either the growth performance or volumetric yield of the production strain. 0.5 g/L Fab' fragment (75 L scale) and 0.7 g/L (20 L scale) was achieved for both unmodified and cell-engineered production strains. Unexpectedly, nuclease-modified cells achieved maximum Fab' levels 8–10 h earlier than the original, unmodified production strain. Scale-down studies of homogenates showed that nuclease-mediated hydrolysis of high MW DNA progressed to completion within minutes of homogenization, even when homogenates were chilled on ice, with no loss of Fab' product and no need for additional co-factors or buffering. Biotechnol. Bioeng. 2012; 109:517–527. © 2011 Wiley Periodicals, Inc.