Xylan represents a major component of lignocellulosic biomass, and its utilization by Saccharomyces cerevisiae is crucial for the cost effective production of ethanol from plant biomass. A recombinant xylan-degrading and xylose-assimilating Saccharomyces cerevisiae strain was engineered by co-expression of the xylanase (xyn2) of Trichoderma reesei, the xylosidase (xlnD) of Aspergillus niger, the Scheffersomyces stipitis xylulose kinase (xyl3) together with the codon-optimized xylose isomerase (xylA) from Bacteroides thetaiotaomicron. Under aerobic conditions, the recombinant strain displayed a complete respiratory mode, resulting in higher yeast biomass production and consequently higher enzyme production during growth on xylose as carbohydrate source. Under oxygen limitation, the strain produced ethanol from xylose at a maximum theoretical yield of ~90%. This study is one of only a few that demonstrates the construction of a S. cerevisiae strain capable of growth on xylan as sole carbohydrate source by means of recombinant enzymes.