A new strain, Candida tropicalis UFMG BX 12-a, was found to produce higher yields of xylitol on poplar wood hemicellulose hydrolysate. The hemicellulose hydrolysate liquor was detoxified using a novel method we developed, involving vacuum evaporation and solvent separation of inhibitors which made the hydrolysate free of toxins while retaining high concentrations of fermentable sugars. The effect of the detoxification method on the fermentation was also reported and compared to well-known methods reported in literature. In this study, the new strain C. tropicalis UFMG BX 12-a was used on the detoxified hydrolysate to produce xylitol. It was also compared to Candida guilliermondii FTI 20037, which has been reported to be one of the best strains for fermentative production of xylitol. To further improve the efficiency of the fermentation process, these strains were immobilized in calcium alginate beads. The yield (0.92 g g(-1)) and productivity (0.88 g L-1 h(-1)) obtained by fermenting the wood hydrolysate detoxified by our new detoxification technique using an immobilized new Candida strain were found to be higher than the values reported in literature.