The fodder yeast Candida utilis is able to use xylose mono- and oligomers as sources of carbon but not the abundant polymer xylan. C. utilis transformants producing the Penicillium simplicissimum xylanase XynA were constructed using expression vectors encoding fusions of the Saccharomyces cerevisiae Mf alpha 1 pre-pro secretion leader to XynA. The Mf alpha 1-XynA fusion was efficiently processed in transformants and XynA was secreted almost quantitatively into the culture medium. Secreted XynA was enzymatically active and allowed transformants to grow on xylan as the sole carbon source. Addition of a second expression unit for the heterologous green fluorescent protein (GFP) generated C. utilis transformants, which showed intracellular GFP fluorescence during growth on xylan. The results suggest that xylanase-producing C. utilis is suited as a cost-effective host organism for heterologous protein production and for other biotechnical applications.