BACKGROUND: In this research the use of soybean hull hydrolysate (SHH) as substrate for xylitol and ethanol production using an osmotolerant strain of Candida guilliermondii was studied. The production of alcohols was investigated in batch cultivations in which the variable parameter was the volumetric oxygen mass transfer coefficient (k(L)a) obtained from three different conditions of air supply: anaerobic (1150 rpm, no aeration); microaerobic (300 rpm, 1 vvm), and aerobic (600 rpm, 2 vvm), corresponding to k(L)a values of 0; 8; and 46 h(-1), respectively. RESULTS: SHH, although presenting a very high osmotic pressure (1413 mOsm kg(-1)), was completely metabolized under aerobic conditions with high biomass productivities of 0.49 g cells (L h)(-1), with little formation of ethanol. Xylitol was produced under microaeration, with product yield of 0.22 g g(-1) xylose, with the formation of glycerol as a by-product. No xylose was metabolized under anaerobic conditions, but ethanol was produced from hexoses with high product yields of 0.5 g g(-1). CONCLUSION: These results suggest that the hydrolysis of soybean hull and its conversion to ethanol and other alcohols could be an important use of this agro-industrial waste, which could be used for biofuel, xylitol or biomass production, depending on the aeration conditions of the cultures. (C) 2008 Society of Chemical Industry