Metabolic engineering of Saccharomyces cerevisiae for xylose fermentation has often relied on insertion of a heterologous pathway consisting of NAD(P)H-dependent xylose reductase (XR) and NAD-dependent xylitol dehydrogenase (XDH). Low ethanol yield and formation of fermentation by-products such as xylitol and glycerol seen for many of the strains constructed in this way have been ascribed to incomplete coenzyme recycling in the steps catalyzed by XR and XDH. We have used structure-guided engineering of Candida tenuis XR and Galactocandida mastotermitis XDH to obtain enzyme pairs that display well matched utilization of NAD(H) and NADP(H). Yeast strains producing XR and XDH variants that show altered coenzyme selectivity exhibit notably improved fermentation capabilities as compared to the reference strain expressing the genes for the wild-type enzymes.