Saccharomyces cerevisiae has been engineered for producing ethanol from xylose, the second most abundant sugar in cellulosic biomass hydrolyzates. Heterologous expressions of xylose reductase (XYL1) and xylitol dehydrogenase (XYL2), or of xylose isomerase (xylA), either case of which being accompanied by overexpression of xylulokinase (XKS1 or XYL3), are known as the prevalent strategies for metabolic engineering of S. cerevisiae to ferment xylose. In this study, we propose an alternative strategy that employs overexpression of GRE3 coding for endogenous aldose reductase instead of XYL1 to construct efficient xylose-fermenting S. cerevisiae. Replacement of XYL1 with GRE3 has been regarded as an undesirable approach because NADPH-specific aldose reductase (GRE3) would aggravate redox balance with xylitol dehydrogenase (XYL2) using NAD+ exclusively. Here, we demonstrate that engineered S. cerevisiae overexpressing GRE3, XYL2, and XYL3 can ferment xylose as well as a mixture of glucose and xylose with higher ethanol yields (0.29–0.41 g g−1 sugars) and productivities (0.13–0.85 g L−1 h−1) than those (0.23–0.39 g g−1 sugars, 0.10–0.74 g L−1 h−1) of an isogenic strain overexpressing XYL1, XYL2, and XYL3 under oxygen-limited conditions. We found that xylose fermentation efficiency of a strain overexpressing GRE3 was dramatically increased by high expression levels of XYL2. Our results suggest that optimized expression levels of GRE3, XYL2, and XYL3 could overcome redox imbalance during xylose fermentation by engineered S. cerevisiae under oxygen-limited conditions.