This paper investigates the effects of the oxygenation level on the performance of D-xylose alcoholic fermentation by free- and immobilized-cell batch cultures of Candida shehatae (ATCC 22984). Yeast cells were immobilized in composite agar layer/microporous membrane structures. Fermentations were performed under varying oxygenation levels corresponding to different O-2 flow rates (OFRs). Low OFRs enhanced the fermentation performance of free and immobilized yeasts. The best ethanol yield coefficient, obtained at an OFR of 5 mmol O-2 h(-1) dm(-3) for both culture modes, was slightly higher (0.425 gg(-1)) for immobilized cultures than for their free counterparts (0.39 gg(-1)). More sustained aeration inhibited ethanol production by free and immobilized organisms. However, this inhibition was more pronounced for agar-entrapped cultures. Xylitol production of free cultures normally decreased as the OFR increased. At high OFR, however, immobilized organisms surprisingly produced more xylitol than at lower OFR or in anaerobiosis. This effect is discussed by referring to the mass transfer limitations that occur inside the immobilized-cell structures. Gelentrapped cultures displayed higher specific and volumetric production rates of ethanol and xylitol than free-cell cultures.