Pichia stipitis CBS 6054 is a native xylose-fermenting yeast. The mechanism and regulation of xylose metabolism in P. stipitis have been partially characterized and genes from P. stipitis have been used to engineer xylose metabolism in Saccharomyces cerevisiae.  To better understand the yeast xylose fermentation and to further develop the capacity for P. stipitis to produce ethanol, we have sequenced and assembled its complete genome. The sequence data have revealed unusual aspects of genome organization, numerous genes for bioconversion, a preliminary insight into regulation of central metabolic pathways and several examples of colocalized genes with related functions. The genome sequence provides insight into how P. stipitis regulates its redox balance while very efficiently fermenting xylose under microaerobic conditions.  Automated sequencing of EST libraries from cells grown under four different conditions improved our gene models while providing an assessment of the relative expression of the major transcripts.  Transcripts of a few genes that are clearly necessary for high levels of xylose assimilation are down regulated under oxygen limitation on xylose.  Other transcripts, particularly KGD2 and GDH2 are clearly regulated in a manner that would reduce NADH formation and thereby help to balance cofactors under these same conditions. Resequencing of a cyc1 deletion mutant derived from CBS 6054 has additional mutational events in the ORFs of several genes.  These studies provide a foundation for a rational approach to strain development through metabolic engineering.