Zymomonas mobilis is a superb ethanol producer with productivity exceeding yeast strains by several fold. Although metabolic engineering was successfully applied to expand its substrate range to include xylose, xylose fermentation lagged far behind glucose. In addition, xylose fermentation was often incomplete when its initial concentration was higher than 5%. Improvement of xylose fermentation is therefore necessary. In this work, we applied adaptation to improve xylose fermentation in metabolically engineered strains. As a result of adaptation over 80 days and 30 serial transfers in a medium containing high concentration of xylose, a strain, referred as A3, with markedly improved xylose metabolism was obtained. The strain was able to grow on 10% (w/v) xylose and rapidly ferment xylose to ethanol within 2 days and retained high ethanol yield. Similarly, in mixed glucose–xylose fermentation, a total of 9% (w/v) ethanol was obtained from two doses of 5% glucose and 5% xylose (or a total of 10% glucose and 10% xylose). Further investigation reveals evidence for an altered xylitol metabolism in A3 with reduced xylitol formation. Additionally xylitol tolerance in A3 was increased. Furthermore, xylose isomerase activity was increased by several times in A3, allowing cells to channel more xylose to ethanol than to xylitol. Taken together, these results strongly suggest that altered xylitol metabolism is key to improved xylose metabolism in adapted A3 strain. This work further demonstrates that adaptation and metabolic engineering can be used synergistically for strain improvement. Biotechnol. Bioeng. 2011; 108:777–785. © 2010 Wiley Periodicals, Inc.