ABSTRACT Thermophilic anaerobic noncellulolytic Thermoanaerobacter species are of great biotechnological importance in cellulosic ethanol production due to their ability to produce high ethanol yields by simultaneous fermentation of hexose and pentose. Understanding the genome structure of these species is critical to improving and implementing these bacteria for possible biotechnological use in consolidated bioprocessing schemes (CBP) for cellulosic ethanol production. Here we describe a comparative genome analysis of two ethanologenic bacteria, Thermoanaerobacter sp. X514 and Thermoanaerobacter pseudethanolicus 39E. Compared to 39E, X514 has several unique key characteristics important to cellulosic biotechnology, including additional alcohol dehydrogenases and xylose transporters, modifications to pentose metabolism, and a complete vitamin B 12 biosynthesis pathway. Experimental results from growth, metabolic flux, and microarray gene expression analyses support genome sequencing-based predictions which help to explain the distinct differences in ethanol production between these strains. The availability of whole-genome sequence and comparative genomic analyses will aid in engineering and optimizing Thermoanaerobacter strains for viable CBP strategies.