Simultaneous saccharification and co-fermentation (SSCF) of waste paper sludge to ethanol was investigated using two recombinant xylose-fermenting microbes: Zymomonas mobilis 8b and Saccharomyces cerevisiae RWB222. S. cerevisiae RWB222 produced over 40 g/L ethanol with a yield of 0.39 g ethanol/g carbohydrate on paper sludge at 37 degrees C, while similar titers and yields were achieved by Z. mobilis 8b at 30 degrees C. Both S. cerevisiae RWB222 and Z. mobilis 8b exhibited decreasing cell viability at 37 degrees C when producing over 40 g/L ethanol. A high ethanol concentration can account for S. cerevisiae RWB222 viability loss, but ethanol concentration was not the only factor influencing Z. mobilis 8b viability loss at 37 degrees C. Over 3 g/L residual glucose was observed at the end of paper sludge SSCF by Z. mobilis 8b, and a statistical analysis revealed that a high calcium concentration originating from paper sludge, a high ethanol concentration, and a high temperature were the key interactive factors resulting in glucose accumulation. The highest ethanol yields were achieved by SSCF of paper sludge with S. cerevisiae RWB222 at 37 degrees C and Z mobilis 8b at 30 degrees C. With good sugar consumption at 37 degrees C, S. cerevisiae RWB222 was able to gain an improvement in the polysaccharide to sugar yield compared to that at 30 degrees C, whereas Z. mobilis 8b at 30 degrees C had a lower polysaccharide to sugar yield, but a higher sugar to ethanol yield than S. cerevisiae. Both organisms under optimal conditions achieved a 19% higher overall conversion of paper sludge to ethanol than the non-xylose utilizing S. cerevisiae D5A at its optimal process temperature of 37 degrees C. Biotechnol. Bioeng. 2010;107: 235-244. (c) 2010 Wiley Periodicals, Inc.