We have integrated and coordinately expressed in Saccharomyces cerevisiae a xylose isomerase and cellobiose phosphorylase from Ruminococcus flavefaciens that enables fermentation of glucose, xylose, and cellobiose under completely anaerobic conditions. The native xylose isomerase was active in cell-free extracts from yeast transformants containing a single integrated copy of the gene. We improved the activity of the enzyme and its affinity for xylose by modifications to the 5'-end of the gene, site-directed mutagenesis, and codon optimization. The improved enzyme, designated RfCO*, demonstrated a 4.8-fold increase in activity compared to the native xylose isomerase, with a K(m) for xylose of 66.7 mM and a specific activity of 1.41 μmol/min/mg. In comparison, the native xylose isomerase was found to have a K(m) for xylose of 117.1 mM and a specific activity of 0.29 μmol/min/mg. The coordinate over-expression of RfCO* along with cellobiose phosphorylase, cellobiose transporters, the endogenous genes GAL2 and XKS1, and disruption of the native PHO13 and GRE3 genes allowed the fermentation of glucose, xylose, and cellobiose under completely anaerobic conditions. Interestingly, this strain was unable to utilize xylose or cellobiose as a sole carbon source for growth under anaerobic conditions, thus minimizing yield loss to biomass formation and maximizing ethanol yield during their fermentation.