BACKGROUND: In an effort to obtain higher-value-added derivatives, a process, starting with acid hydrolysis pretreatment of waste wood followed by fermentation and ultrafiltration, for production of xylitol from pulp mill hardwood wastes was developed and is reported here. RESULTS: Sequential removals of furfural, 5-hydroxymethylfurfural, total phenols; and acetic acid were performed with powdered activated carbon and cationic ion exchange columns for the neutralized hydrolysate. Batch fermentations with yeast extract and detoxified and concentrated hydrolysates were conducted using Candida tropicalis (BCRC 20520), Candida boidinii (BCRC 21432), Candida guilliermondii (BCRC 21549), Candida utilis (BCRC 20334) and Pichia anomala (BCRC 21359). Among the yeast strains, C. tropicalis exhibited the highest volumetric rates of product generation (Q(P), 0.73 g L-1 h(-1)) and substrate consumption (Q(S), 1.35 g L-1 h(-1)) over 44 h. Additional C. tropicalis fermentation runs achieved product yield (Y-P/S) values of 0.70 and 0.45 g g(-1) after 96 h with urea and soybean meal respectively. Between 9.59 and 25.51 g L-1 of ethanol was also produced in these systems. Pretreatment with 2 mg L-1 polydiallyldimethylammonium chloride on the membrane surface increased protein rejection from 85 to 96% for fermentation broth in a 2 h span. CONCLUSION: The present study demonstrates that xylitol, a value-added derivative, can be effectively obtained from hardwood wastes using low-cost fermentation media. (c) 2008 Society of Chemical Industry.