In the dilute acid pretreatment of lignocellulose, xylose substituted with alpha-1,2-methylglucuronate is released as methylglucuronoxylose (MeGAX), which cannot be fermented by biocatalysts currently used to produce biofuels and chemicals. Enterobacter asburiae JDR-1, isolated from colonized wood, efficiently fermented both MeGAX and xylose in acid hydrolysates of sweetgum xylan. Deletion of pflB and als genes in this bacterium modified the native mixed acid fermentation pathways to one for homolactate production. The resulting strain, Enterobacter asburiae L1, completely utilized both xylose and MeGAX in a dilute acid hydrolysate of sweetgum xylan and produced lactate approximating 100% of the theoretical maximum yield. Enterobacter asburiae JDR-1 offers a platform to develop efficient biocatalysts for production of fuels and chemicals from hemicellulose hydrolysates of hardwood and agricultural residues.