A xylose-fermenting bacterium of the family Enterobacteriaceae was isolated from olive mill wastewater. It converted xylose to ethanol with a yield of 0.19 g ethanol g(-1) xylose. Although phenolic compounds normally inhibit pentose-utilizing microorganisms, this isolate was tolerant to phenol. Both the yield and the productivity of xylose fermentation decreased by 30% when phenol was added at a final concentration of 0.8 g phenol l(-1). Xylose (23 g l(-1)) was totally fermented to ethanol (4.3 g l(-1)) within 48 h in the absence of phenol; however, in the presence of 0.8 g phenol l(-1), only 3.3 g ethanol l(-1) was obtained from the same starting concentration of xylose after 70 h.