Abstract Deactivation kinetics, as well as the operational stability of enzymes, is crucial in economic feasibility of industrial enzymatic processes. In this study, thermal inactivation profiles of Debaryomyces nepalensis NCYC 3413 xylose reductase (DnXR) were obtained at different temperatures. Thermodynamic parameters of the deactivation process were determined by measuring the residual activity of the enzyme. Structural characteristics of the enzyme were determined using circular dichroism, differential scanning calorimetric techniques. Enzyme retained 75–80% activity at 35 °C after incubation for 5 h. At higher temperatures, the residual activity reduced at a faster rate where only 10% of the initial activity was retained in 10 min at 50 °C. Values of ΔH* (-300.47 kJmole−1), ΔG* (−530.66 kJ mole−1) and ΔS* (714.51 × 10−3 kJ K−1 mole−1) indicated that thermal deactivation of DnXR is enthalpy driven. In the presence of cofactor NADPH, melting temperature of the enzyme increased by 2 °C with a decrease in rate of thermal deactivation. Substrate found not to have a positive effect on thermal stability. This is the first report providing information on the thermal deactivation kinetics, thermodynamic parameter estimation and the influence of cofactor on thermal stability of Debaryomyces nepalensis NCYC 3413 xylose reductase.