Hemicellulosic sugars, especially d-xylose, are relatively abundant in agricultural and forestry residues. Moreover, they can be recovered from the hemicelluloses by acid hydrolysis more readily and in better yields than can d-glucose from cellulose. These factors favor hemicellulosic sugars as a feedstock for production of ethanol and other chemicals. Unfortunately, d-xylose is not so readily utilized as d-glucose for the production of chemicals by microorganisms. The reason may lie in the biochemical pathways used for pentose and hexose metabolism. Different pathways are employed by prokaryotes and eukaryotes in the initial stages of pentose assimilation. Transport and phosphorylation possibly limit the overall rate of d-xylose utilization. The intermediary steps of pentose metabolism are generally similar for both bacteria and fungi, but substantial variations exist. Phosphoketolase is present in some yeasts and bacteria able to use pentoses. Regulation of the oxidative pentose phosphate pathway occurs at d-glucose-6-phosphate dehydrogenase by the intracellular concentration of NADPH. Regulation of nonoxidative pentose metabolism is not well understood. In some yeasts and fungi, conversion of d-xylose to ethanol takes place under aerobic or anaerobic conditions with rates and yields generally higher in the former than in the latter. Xylitol and acetic acid are major byproducts of such conversions. Many yeasts are capable of utilizing d-xylose for the production of ethanol. Direct conversion of d-xylose to ethanol is compared with two-stage processes employing yeasts and d-xylose isomerase.