The xylitol dehydrogenase gene (xdh) of Bacillus pallidus was cloned and overexpressed in Escherichia coli using pQE60 vector, for the first time. The open reading frame of 759 bp encoded a 253 amino acid protein with a calculated molecular mass of 27,333 Da. The recombinant xylitol dehydrogenase (XDH) was purified to homogeneity by three-step column chromatography, producing a single SDS-PAGE band of 28 kDa apparent molecular mass. The enzyme exhibited maximal activity at 55 °C in glycine-NaOH buffer pH 11.0, with 66% of initial enzyme activity retained after incubation at 40 °C for 1 h. In further application of the recombinant bacterium to L-xylulose production from xylitol (initial concentration 5%) using a resting cell reaction, 35% L-xylulose was produced within 24 h. This result indicates that this recombinant XDH is applicable in the large-scale production of L-xylulose.