ABSTRACT: BACKGROUND: Pichia stipitis xylose reductase (Ps-XR) has been used to design Saccharomyces cerevisiae strains that are able to ferment xylose. One example is the industrial S. cerevisiae xylose-consuming strain TMB3400, which was constructed by expression of P. stipitis xylose reductase and xylitol dehydrogenase and overexpression of endogenous xylulose kinase in the industrial S. cerevisiae strain USM21. RESULTS: In this study, we demonstrate that strain TMB3400 not only converts xylose, but also displays higher tolerance to lignocellulosic hydrolysate during anaerobic batch fermentation as well as 3 times higher in vitro HMF and furfural reduction activity than the control strain USM21. Using laboratory strains producing various levels of Ps-XR, we confirm that Ps-XR is able to reduce HMF both in vitro and in vivo. Ps-XR overexpression increases the in vivo HMF conversion rate by approximately 20%, thereby improving yeast tolerance towards HMF. Further purification of Ps-XR shows that HMF is a substrate inhibitor of the enzyme. CONCLUSION: We demonstrate for the first time that xylose reductase is also able to reduce the furaldehyde compounds that are present in undetoxified lignocellulosic hydrolysates. Possible implications of this newly characterized activity of Ps-XR on lignocellulosic hydrolysate fermentation are discussed.