The Escherichia coli xylose isomerase gene was transformed into Schizosaccharomyces pombe for direct d-xylose utilization. In order to understand d-xylose metabolism and determine the limiting factors on d-xylose utilization by the transformed yeast, d-xylose transport, xylose isomerization, and xylulose phosphorylation were investigated. The results indicated that low activity of xylose isomerization in the cloned yeast was the limiting step for d-xylose fermentation. An in vitro study showed that yeast proteases decreased xylose isomerase activity. Xylitol, a by-product of d-xylose fermentation, had no effect on the activity of xylose isomerase.