AbstractSimultaneous intracellular depolymerization of xylo-oligosaccharides (XOS) and acetate fermentation by engineeredSaccharomyces cerevisiaeoffers an advance towards more cost-effective second-generation (2G) ethanol production. As xylan is one of the most abundant polysaccharides present in lignocellulosic residues, the transport and breakdown of XOS in an intracellular environment might bring a competitive advantage for recombinant strains in competition with contaminating microbes, which are always present in fermentation tanks; furthermore, acetic acid is a ubiquitous toxic component in lignocellulosic hydrolysates, deriving from hemicellulose and lignin breakdown. In the present work, the previously engineeredS. cerevisiaestrain, SR8A6S3, expressing NADPH-linked xylose reductase (XR), NAD+-linked xylitol dehydrogenase (XDH) (for xylose assimilation), as well as NADH-linked acetylating acetaldehyde dehydrogenase (AADH) and acetyl-CoA synthetase (ACS) (for an NADH-dependent acetate reduction pathway), was used as the host for expressing of two β-xylosidases,GH43-2andGH43-7, and a xylodextrin transporter,CDT-2, fromNeurospora crassa, yielding the engineered strain SR8A6S3-CDT2-GH432/7. Both β-xylosidases and the transporter were introduced by replacing two endogenous genes,GRE3andSOR1, that encode aldose reductase and sorbitol (xylitol) dehydrogenase, respectively, which catalyse steps in xylitol production. Xylitol accumulation during xylose fermentation is a problem for 2G ethanol production since it reduces final ethanol yield. The engineered strain, SR8A6S3-CDT2-GH432/7, produced ethanol through simultaneous co-utilization of XOS, xylose, and acetate. The mutant strain produced 60% more ethanol and 12% less xylitol than the control strain when a hemicellulosic hydrolysate was used as a mono- and oligosaccharide source. Similarly, the ethanol yield was 84% higher for the engineered strain using hydrolysed xylan compared with the parental strain. The consumption of XOS, xylose, and acetate expands the capabilities ofS. cerevisiaefor utilization of all of the carbohydrate in lignocellulose, potentially increasing the efficiency of 2G biofuel production.HighlightsIntegration of XOS pathway in an acetate-xylose-consumingS. cerevisiaestrain;Intracellular fermentation of XOS, acetate and xylose improved ethanol production;Deletion of bothsor1Δ andgre3Δ reduced xylitol production.