Hydrolysis of lignocellulose to fermentable sugars and their subsequent conversion to ethanol remain great challenges in the biofuel industry. Rotten wood is first colonized by bacteria and molds that possess strong hydrolases. Yeasts are also an important group of microorganisms that may participate in wood hydrolysis. Decaying wood could provide a rich natural reservoir of yeasts possessing promising hydrolytic activities, including xylanases, cellulases, β-glucosidases, or abilities essential for the fermentation of pentose sugars derived from lignocellulose degradation, especially xylose. Therefore, the aim of this work was to screen yeasts isolated from rotten wood samples for the production of hydrolytic enzymes directed at lignocellulose components and the ability to ferment xylose, L-arabinose, and cellobiose. Methods. Yeast strains were isolated from 22 samples of rotten wood and identified by phenotypic characteristics according to Kurtzman et al. Hydrolytic properties and the ability of the isolated strains to ferment xylose, L-arabinose, and cellobiose were determined using conventional methods. Results. 30 strains of yeasts and yeast-like micromycetes were isolated from 22 samples of rotten wood in the Holosiivskyi Forest, Kyiv. Based on phenotypic properties, most of the isolated yeasts belonged to ascomycetous yeasts and were represented by the following genera: Candida (8 strains), Debaryomyces (5 strains), Kluyveromyces (5 strains), Pichia (5 strains), Scheffersomyces (2 strains), Lachancea, Hanseniaspora, Saccharomyces, and Geotrichum/Galactomyces. A strain of yeast-like non-photosynthetic alga Prototheca sp. was also detected. Most of the isolated microfungi (66.6% isolates) exhibited extracellular β-glucosidase activity, two Candida tropicalis strains possessed weak pectinase and xylanase activity. None of the isolates demonstrated extracellular cellulase activity. Two yeast strains preliminarily identified as Scheffersomyces stipitis were able to ferment xylose at a concentration of 20—100 g/L over a wide temperature range up to 37°C. Acetic acid at 0.25—1% (v/v) concentration resulted in the complete inhibition of xylose fermentation. Ethanol production from xylose up to 6 g/L was observed under the microaerobic fermentation conditions for 24 hr at the substrate concentration 40 g/L, but the subsequent fermentation resulted in decreasing ethanol concentration presumably due to ethanol re-assimilation. None of the isolated strains was capable of fermenting cellobiose or L-arabinose under the microaerobic conditions. Conclusions. This work provides the characterization of yeast microbiota of rotten wood that was represented predominantly by ascomycetous yeasts. The dominant extracellular hydrolytic activity of the isolates was β-glucosidase. This is the first report on the isolation of xylose-fermenting yeasts Scheffersomyces stipitis in Ukraine, which comprised 7% of all the microfungi isolated from rotten wood.