The physiological responses of Hansenula polymorpha wild‐type and mutant strains 17B (dihydroxyacetone kinase‐negative) and 17BG51 (dihydroxyacetone kinase‐ and glycerol kinase‐negative) to growth on mixtures of xylose and methanol in chemostats were investigated. Increasing methanol concentrations (0–110 mM) in the feed of the wild‐type culture resulted in increasing cell densities and a gradual switch towards methanol metabolism. At the lower methanol feed concentrations the mutant cultures used methanol and xylose to completion and changes in enzyme patterns comparable to the wild type were observed. This was not reflected in significant changes in cell densities. Instead, formaldehyde assimilation resulted in dihydroxyacetone (DHA) production, which was proportional to the amount of methanol added. At intermediate methanol concentration the cultures showed a strong variation in DHA levels and cell densities. Further increased in the methanol feed concentrations resulted in a drop in DHA accumulation rates, repression of alcohol oxidase synthesis and accumulation of residual methanol. The phenomena were studied in more detail in transition experiments and with gradients of methanol. The results indicate that xylulose‐5‐phosphate (Xu5P) generated in xylose metabolism served as acceptor molecule for formaldehyde assimilation by the peroxisomal enzyme DHA synthase. Accumulation of DHA in the mutant cultures, however, further diminished the availability of carbon for growth. The data suggest that with increasing methanol concentrations Xu5P eventually became growth rate limiting. This resulted in an unstable situation but wash‐out of the culture did not occur to a significant extent. Instead, DHA accumulation ceased and cell densities, and enzymes specifically involved in xylose metabolism increase, indicating that the organism resumed its xylose metabolism. The molecular mechanisms controlling the partitioning of Xu5P over xylose (pentose phosphate pathway) and methanol (peroxisome) metabolism under these conditions remain to be elucidated.