The effect of oxygen limitation on xylose fermentation by Pichia stipitis (CBS 6054) was investigated in continuous culture. The maximum specific ethanol productivity (0.20 g of ethanol g dry weight −1 h −1 ) and ethanol yield (0.48 g/g) was reached at an oxygen transfer rate below 1 mmol/liter per h. In the studied range of oxygenation, the xylose reductase (EC 1.1.1.21) and xylitol dehydrogenase (EC 1.1.1.9) activities were constant as well as the ratio between the NADPH and NADH activities of xylose reductase. No xylitol production was found. The pyruvate decarboxylase (EC 4.1.1.1) activity increased and the malate dehydrogenase (EC 1.1.1.37) activity decreased with decreasing oxygenation. With decreasing oxygenation, the intracellular intermediary metabolites sedoheptulose 7-phosphate, glucose 6-phosphate, fructose 1,6-diphosphate, and malate accumulated slightly while pyruvate decreased. The ratio of the xylose uptake rate under aerobic conditions, in contrast to that under anaerobic assay conditions, increased with increasing oxygenation in the culture. The results are discussed in relation to the energy level in the cell, the redox balance, and the mitochondrial function.