We report engineering Thermoanaerobacterium saccharolyticum , a thermophilic anaerobic bacterium that ferments xylan and biomass-derived sugars, to produce ethanol at high yield. Knockout of genes involved in organic acid formation (acetate kinase, phosphate acetyltransferase, and L-lactate dehydrogenase) resulted in a strain able to produce ethanol as the only detectable organic product and substantial changes in electron flow relative to the wild type. Ethanol formation in the engineered strain (ALK2) utilizes pyruvate:ferredoxin oxidoreductase with electrons transferred from ferredoxin to NAD(P), a pathway different from that in previously described microbes with a homoethanol fermentation. The homoethanologenic phenotype was stable for >150 generations in continuous culture. The growth rate of strain ALK2 was similar to the wild-type strain, with a reduction in cell yield proportional to the decreased ATP availability resulting from acetate kinase inactivation. Glucose and xylose are co-utilized and utilization of mannose and arabinose commences before glucose and xylose are exhausted. Using strain ALK2 in simultaneous hydrolysis and fermentation experiments at 50°C allows a 2.5-fold reduction in cellulase loading compared with using Saccharomyces cerevisiae at 37°C. The maximum ethanol titer produced by strain ALK2, 37 g/liter, is the highest reported thus far for a thermophilic anaerobe, although further improvements are desired and likely possible. Our results extend the frontier of metabolic engineering in thermophilic hosts, have the potential to significantly lower the cost of cellulosic ethanol production, and support the feasibility of further cost reductions through engineering a diversity of host organisms.