The larger sizes, thicker cell walls, resistance to bacteriophage and low nutritional requirements of yeasts all confer advantages over bacteria for the large-scale fermentation of cellulosic and hemicellulosic sugars to ethanol, butanol and other products. Saccharomyces yeasts ferment glucose and sucrose very well, but they lack the enzymatic machinery and regulatory networks for the efficient fermentation of cellulosic and hemicellulosic sugars.  Pichia stipitis can ferment xylose, galactose, mannose, glucose, cellobiose and various hemicellulosic oligosaccharides in mixtures of pure sugars and from hemicellulosic hydrolysates.  It produces over 60 g/l ethanol from xylose and it ferments cellobiose almost as rapidly as glucose.  Much can be learned from this model organism in developing improved yeasts. We have used whole genome expression array technology to identify distinct genes involved in the assimilation and fermentation of cellulosic and hemicellulosic sugars, and we have targeted critical genes for engineered expression.  We have synthesized selectable markers for drug resistance genes flanked with LoxP sites that enable highly efficient transformation and subsequent excision of markers with Cre recombinase. With these tools, we have obtained strains of P. stipitis engineered with multiple genes that show significantly better ethanol production than the best wild-type strains known.  We have used these technologies along with mating, adaptive evolution, screening and selection to engineer several strains of native xylose and cellobiose fermenting yeasts for commercial ethanol production. This presentation will review gene targets, global expression array results and the performance of genetically engineered strains on mixed sugars, hydrolysates and pretreated cellulosics.