The economic impact of conversion of xylose to ethanol for a wood-to-ethanol plant was examined, and the maximum potential reduction in the price of ethanol from utilization of xylose is estimated to be $0.42 per gallon from a base case price of $1.65. The sensitivity of the price of ethanol to the yield, ethanol concentration and rate of the xylose fermentation was also examined, and the price of ethanol is most affected by changes in yield and ethanol concentration, with rate of lesser importance. Current performances of various xylose conversion biocatalysts were analyzed, and C. shehatae and P. stipitis appear to be the best yeasts.