Complete enzymatic hydrolysis of cellulose to glucose is generally required for efficient fermentation to ethanol. This hydrolysis requires endoglucanase, exoglucanase, and cellobiase. The Gram-negative bacterium, Klebsiella oxytoca, contains the native ability to transport and metabolize cellobiose, minimizing the need for extracellular cellobiase. Strain P2 is a recombinant derivative in which the Zymomonas mobilis pdc and adhB genes have been integrated into the chromosome and expressed, directing the metabolism of pyruvate to ethanol. This organism has been evaluated in simultaneous sacchari-fication and fermentation (SSF) experiments to determine optimal conditions and limits of performance. The temperature was varied between 32 and 40 °C over a pH range of 5.0–5.8 with 100 g/L crystalline cellulose (Sigmacell 50, Sigma Chemical Company, St. Louis, MO) as the substrate and commercial cellulase (Spezyme CE, South San Francisco, CA). A broad optimum for SSF was observed, with a pH of 5.2–5.5 and temperatures of 32–35 °C, which allowed the production of over 44 g of ethanol/L (81–86% of the maximum theoretical yield). Although the rate of ethanol production increased with cellulase, diminishing improvements were observed at enzyme loadings above 10 filter paper units/g of cellulose. Over 40 g of ethanol/L was produced with relatively low enzyme loadings: 7–10 filter paper units/g of cellulose. Two optimal SSF conditions were identified for fermentation yield with strain P2: pH 5.2 at 35 °C and pH 5.5 at 32 °C. Under these conditions, 47 g of ethanol/L was produced in 144 h (0.48 g of ethanol/g of cellulose). Maximal rates of ethanol production were observed at 37 °C and pH 5.0 and produced over 40 g of ethanol/L in 72 h (final yield of 0.432 g of ethanol/g of cellulose after 96 h). All fermentations except those conducted at 40 °C and low pH (pH 5.0–5.5) exceeded 70% of theoretical ethanol yields. Tight process controls may not be required using this organism since temperatures between 32 and 37 °C at pH ranges between 5.0 and 5.8 still produced good yields.