In Korea fermented fish and shellfish have traditionally been favored and consumed as seasonings or further processed for fish sauce. Three major items in production quantity among more than thirty kinds which are presently available in the market are fermented anchovy, oyster and small shrimp. They are usually used as a seasoning mixture of Kimchi in order to provide a distinctive flavor. Fermented small shrimp, Acetes chinensis is most widely and largely used ana occupies an important position in food industry of this country. But no study on its taste compounds has been reported. This study was attempted to establish the basic data for evaluating taste compounds of fermented small shrimp. The changes of such compounds during fermentation as free amino acids, nucleotides and their related compounds, TMAO, TMA, and betaine were analysed. In addition, change in microflora during the fermentation under the halophilic circumstance was also investigated. The samples were prepared with three different salt contents of 20, 30 and $40\%$ to obtain the proper degree of fermentation at a controlled tempeature of $20{\pm}2^{\circ}C$. The results are summarized as follows: Volatile basic nitrogen increased rapidly until 108 days of fermentation and afterwards it tended to increase slowly. Amino nitrogen also increased rapidly until 43 days of fermentation and then increased slowly. Extract nitrogen increased and marked the maximum value at 72 day fermentation and then decreased slowly. ADP, AMP and IMP tended to degrade rapidly while hypoxanthine increased remarkably at 27 day fermentation but slightly decreased at 72 day fermentation. It is presumed that the characteristic flavor of fermented small shrimp might be attributed to the relatively higher content of hypoxanthine. In the free amino acid composition of fresh small shrimp abundant amino acids were proline, arginine, alanine, glycine, lysine, glutamic acid, leucine, valine and threonine in order. Such amino acids like serine, methionine, isoleucine, phenylalanine, aspartic acid, tyrosine and histidine were poor. In small shrimp extract, proline, arginine, alanine, glycine, lysine and glutamic acid were dominant holding $18.5\%,\;14.6\%,\;10.8\%,\;8.7\%,\;8.1\%\;and\;7.7\%$ of total free amino acids respectively. The total free amino acid nitrogen in fresh small shrimp was $63.9\%$ of its extract nitrogen. The change of free amino acid composition in the extract of small shrimp during fermentation was not observed. Lysine, alanine glutamic acid, proline, glycine and leucine were abundant in both fresh sample and fermented products. The increase of total free amino acids during 72 day fermentation reached approximately more than 2 times as compared with that of fresh sample and then decreased slowly. Fermented small shrimp with $40\%$ of salt was too salty to be commercial quality as the results of organoleptic test showed. It is found that 72 day fermentation with $20\%\;and\;30\%$ of salt gave the most favorable flavor. It is convinced that the characteristic flavor of fermented small shrimp was also attributed to such amino acids as lysine, proline, alanine, glycine and serine known as sweet compounds, as glutamic acid with meaty taste, and as leucine known as bitter taste. The amount of betaine increased during fermentation and reached the maximum at 72 day fermentation and then decreased slowly TMA increased while TMAO decreased during fermentation. The amount of TMAO nitrogen in fermented small shrimp was $200mg\%$ on moisture and salt free base. Betaine and TMAO known as sweet compounds were abundant in fermented small shrimp. It is supposed that these compounds could also play a role as important taste compounds of fermented small shrimp. At the initial stage of fermentation, Achromobacter, Pseudomonas, Micrococcus denitrificans which belong to marine bacteria were isolated. After 40 day fermentation, they disappeared rapidly while Halabacterium, Pediococcus, Sarcian, Micrococcus morrhuae and the yeasts such as Saccharomyces sp. and Torulopsis sp. dominated. It is concluded that the most important taste compounds of fermented small shrimp were amino acids such as lysine, proline, alanine, glycine, serine, glutamic acid, and leucine, betaine, TMAO and hypoxanthine.