Rising crude oil prices and environmental concerns have renewed interest in renewable energy. Cellulosic ethanol promises to deliver a renewable fuel from non-food feedstocks. One technical challenge producing cellulosic ethanol economically is a robust organism to utilize the different sugars present in cellulosic biomass. Unlike starch where glucose is the only sugar present, cellulosic biomass has other sugars such as xylose and arabinose, usually called C5 sugars. This review examines the most promising naturally occurring C5 fermenting organism, Pichia stipitis. In this work, the properties that make P. stipitis unique from other organisms, its physiology and fermentation results on lignocellulosic substrates have been reviewed. P. stipitis can produce 41 g ethanol/l with a potential to cleanup some of the most concentrated toxins. These results coupled with the less stringent nutritional requirements, great resistance to contamination and its thick cell walls makes P. stipitis a viable organism for scale-up. However, P. stipitis has a slower sugar consumption rate compared to Saccharomyces cerevisiae and requires microaerophilic condition for ethanol production. Finally, future studies to enhance fermentation capabilities of this yeast have been discussed.