Xylose utilization is essential for the efficient conversion of lignocellulose to ethanol. The objective of this review is to trace the development of xylose-fermenting yeast strains from their discovery in 1980. Following initial reports, screens of known yeasts identified five species of interest : Candida shehatae, Candida tenuis, Pachysolen tannophilus, Pichia segobiensis, and Pichia stipitis. Candida shehatae strains can be divided into three varieties. Pachysolen tannophilus and Pichia stipitis have been studied most extensively and have the best-understood genetic systems. Improved mutants of P. tannophilis have been obtained by selecting for an inability to oxidize ethanol (eth) and for rapid growth on xylitol and nitrate. Improved P. stipitis mutants have been obtained by selecting for flocculation, decreased utilization of glucose, and growth on noninductive carbon sources. Bacterial xylose isomerase has been cloned and expressed in S. cerevisiae and Schizosaccharomyces pombe, but the heterologous enzyme is inactive. Xylose reductase and xylitol dehydrogenase have been cloned from P. stipitis and expressed in Saccharomyces cerevisiae, giving rise to transformant S. cerevisiae that grow on xylose but that ferment it poorly. A transformation and expression system based on the URA3 marker has recently been developed for P. stipitis so that contemporary genetic methods may be brought to bear on this organism.