Aims:  To determine the effects on xylitol accumulation and ethanol yield of expression of mutated Pichia stipitis xylitol dehydrogenase (XDH) with reversal of coenzyme specificity in recombinant Saccharomyces cerevisiae. Methods and Results:  The genes XYL2 (D207A/I208R/F209S) and XYL2 (S96C/S99C/Y102C/D207A/I208R/F209S) were introduced into S. cerevisiae, which already contained the P. stipitis XYL1 gene (encoding xylose reductase, XR) and the endogenously overexpressed XKS1 gene (encoding xylulokinase, XK). The specific activities of mutated XDH in both strains showed a distinct increase in NADP+‐dependent activity in both strains with mutated XDH, reaching 0·782 and 0·698 U mg−1. In xylose fermentation, the strain with XDH (D207A/I208R/F209S) had a large decrease in xylitol and glycerol yield, while the xylose consumption and ethanol yield were decreased. In the strain with XDH (S96C/S99C/Y102C/D207A/I208R/F209S), the xylose consumption and ethanol yield were also decreased, and the xylitol yield was increased, because of low XDH activity. Conclusions:  Changing XDH coenzyme specificity was a sufficient method for reducing the production of xylitol, but high activity of XDH was also required for improved ethanol formation. Significance and Impact of the Study:  The difference in coenzyme specificity was a vital parameter controlling ethanolic xylose fermentation but the XDH/XR ratio was also important.