Phaffia rhodozyma NRRL Y-17268 cells were proliferated in xylose-containing media made from Eucalyptus wood. Wood samples were subjected to acid hydrolysis under mild operational conditions, and hydrolysates were neutralized with lime. Neutralized hydrolysates were treated with charcoal for removing inhibitors and then supplemented with nutrients to obtain culture media useful for proliferation of the red yeast P. rhodozyma. A set of experiments carried out in orbital shakers proved that hydrolysates containing 16.6 g xy-lose/L supplemented only with 3 g peptone/L performed well as fermentation media. At the end of experiments, xylose was depleted and 10.5 g cells/L were obtained. Biomass was highly pigmented and volumetric carotenoid concentrations up to 5.8 mg carotenoids/L (with 4.6 mg astaxanthin/L) were reached. Further experiments in batch fermenters using concentrated hydrolysates (initial xylose concentrations within 16.6 and 40.8 g/L) led to good biomass concentrations (up to 23.2 g cells/L) with increased pigment concentration (up to 12.9 mg total carotenoids/L, with 10.4 mg astaxanthin/L) and high volumetric rates of carotenoid production (up to 0.079 mg/L.h).