Technologies for the production of alternative fuels are receiving increased attention owing to concerns over the rising cost of petrol and global warming. One such technology under development is the use of yeasts for the commercial fermentation of xylose to ethanol. Several approaches have been employed to engineer xylose metabolism. These involve modeling, flux analysis, and expression analysis followed by the targeted deletion or altered expression of key genes. Expression analysis is increasingly being used to target rate-limiting steps. Quantitative metabolic models have also proved extremely useful: they can be calculated from stoichiometric balances or inferred from the labeling of intermediate metabolites. The recent determination of the genome sequence for P. stipitis is important, as its genome characteristics and regulatory patterns could serve as guides for further development in this natural xylose-fermenting yeast or in engineered Saccharomyces cerevisiae. Lastly, strain selection through mutagenesis, adaptive evolution or from nature can also be employed to further improve activity.