A P. stipitis cDNA library in λgt11 was screened using antisera against P. stipitis xylose reductase and xylitol dehydrogenase, respectively. The resulting cDNA clones served as probes for screening a P. stipitis genomic library. The genomic XYL2 gene was isolated and the nucleotide sequence of the 1089 bp structural gene, and of adjacent non-coding regions, was determined. The XYL2 open-reading frame codes for a protein of 363 amino acids with a predicted molecular mass of 38.5 kDa. The XYL2 gene is actively expressed in S. cerevisiae transformants. S. cerevisiae cells transformed with a plasmid, pRD1, containing both the xylose reductase gene (XYL1) and the xylitol dehydrogenase gene (XYL2), were able to grow on xylose as a sole carbon source. In contrast to aerobic glucose metabolism, S. cerevisiae XYL1-XYL2 transformants utilize xylose almost entirely oxidatively.