Xylitol, a sugar alcohol, is fast gaining ground over other artificial sugar substitutes owing to its advantageous properties. Xylitol is a safer alternative for diabetics because of insulin-independent metabolism. It has beneficial properties suitable to form an important part of odontological formulations. Conventional commercial production of xylitol involves harsh chemical method operating at high temperature and pressure. Thus, microbial production of xylitol is preferred over chemical method, and yeasts have been extensively exploited for this purpose. In the present manuscript, quantitative production of xylitol from d-xylose with the yield of 0.852 gm/gm and volumetric productivity of 1.83 gm/l/h in crystalline form, using novel yeast Pichia caribbica is reported. Also, a mild, safe procedure for product extraction is described. The ability of xylitol to act as a quorum sensing antagonist in gram-negative marker strain Chromobacterium violaceum CV026 has been demonstrated for the first time.