Xylose isomerase from Geobacillus kaustophilus HTA426 was functionally expressed in Escherichia coli BL21 (DE3) and the recombinant E. coli cells were used together with conventional Saccharomyces cerevisiae to produce ethanol from xylose by simultaneous xylose isomerisation and fermentation. When recombinant E. coli cells were used as the source of xylose isomerase, a significant amount of ethanol was produced from xylose, whereas the control without recombinant E. coli cells did not produce any detectable amount of ethanol from xylose. Ethanol production was increased by 38% by feeding more recombinant E. coli at 48 h compared to adding recombinant E. coli only in the beginning, resulting in more ethanol production than P. stipitis CBS6054 under the same conditions. The xylitol accumulation by the in situ process was only 57% of that produced by the P. stipitis CBS6054.