Candida shehatae FPL-702, is a mutant strain obtained from C. shehatae ATCC 22984 by selection for rapid growth on L-xylose and xylitol in the presence of respiratory inhibitors. This strain produced more ethanol from xylose than any other pentose-fermenting yeast strain tested. These included the parental C. shehatae strain ATCC 22984 and other wild-type or mutant strains of Pichia stipitis and Pachysolen tannophilus. C. shehatae FPL-702 showed initial rapid growth on xylose. During fed-batch shake-flask fermentation of glucose, FPL-702 produced 3.5% (w/v) ethanol. Ethanol. production from glucose increased to 5.0% (w/v) when corn steep liquor (CSI,) was added in the fermentation medium. In contrast, CSL reduced consumption of xylose and ethanol production in shake-flask fermentations of xylose and mixtures of xylose and glucose. However, CSL also reduced xylitol formation. Maximum ethanol production from a mixed-sugar fermentation was 3.25% (w/v). C. shehatae FPL-702 did not use L-arabinose during mixed-sugar fermentation in the presence or absence of CSL, but it did grow on arabinose and convert it into arabitol. In the fed-batch reactor, this strain exhibited improved ethanol production rates from mixed sugar in the presence of CSL.