The production of bioethanol from lignocellulosic by-products, such as sugarcane bagasse, stands out as a renewable and sustainable approach to mitigate climate changes. These lignocellulosic materials are mainly composed of polymers that, after a pretreatment step, release fermentable sugars. Hydrothermal pretreatment, in turn, is a technique considered environmentally attractive because it is based on the use of steam, without the use of solvents. The mainly sugar released in this stage (the pentose xylose) is not assimilated by the yeast Saccharomyces cerevisiae. The use of the enzyme xylose isomerase to isomerize xylose to xylulose, which can be consumed by the microorganism in the SIF process (Simultaneous Isomerization and Fermentation), poses as a possible route for the utilization of hydrothermal hydrolysates. Considering that inhibitors of the microbial metabolism are also generated during the pretreatment, the present work evaluated the performance of xylose SIF in sugarcane bagasse hydrothermal hydrolysate using xylose isomerase co-immobilized with S. cerevisiae in Ca-alginate gel. The presence of inhibitors in the hydrolysate significantly influenced the process, with a decrease in xylose assimilation rate from 3.9 g/L/h to 2.6 g/L/h and in ethanol productivity from 1.2 g/L/h to 0.5 g/L/h, when compared to the synthetic medium. However, cell viability was not affected and strategies such as increasing the concentration of biocatalyst and detoxification of the hydrolysate could be applied to improve its performance.