The yeast Saccharomyces cerevisiae efficiently ferments hexose sugars to ethanol, but it is unable to utilize xylose, a pentose sugar abundant in lignocellulosic materials. Recombinant yeast strains capable of xylose metabolism have been reported, however, such strains ferment xylose to ethanol poorly, with significantly lower yields and/or production rates compared to glucose. Our previous studies have indicated that oxygen is one of the key parameters in improving xylose consumption and ethanol yields. In addition, it has been shown that expression of the Vitreoscilla hemoglobin gene (vhb) in Escherichia coli leads to a more oxidized state of the cells under low oxygen concentrations. Therefore, we wanted to investigate the possible benefits expression of VHb encoding gene could bring to xylose fermentation in the recombinant S. cerevisiae yeast strain. Our results indicate that under low hypoxic fermentation conditions VHb improves the ethanol yield from the xylose metabolized. Less carbon was lost in xylitol, which is the major unwanted side product of the xylose-to-ethanol fermentation process. (c) 2005 Elsevier Inc. All rights reserved.