Xylan is a major component of hemicellulose, which constitutes about 40 % of plant biomass. Hydrolysis of xylan into simple sugars is one of the important steps in the conversion of lignocellulosic material to value-added products. During an investigation of cellulose- and xylan-degrading yeasts, two yeast strains that were able to use cellulose and xylan as sole carbon source were found to represent a phylogenetically distinct species in the Spathaspora clade. The closest species in terms of pairwise sequence similarity in the D1/D2 domain of the LSU rRNA gene was Candida subhashii. The novel species can be distinguished from the other species in the Spathaspora clade based on the ability to assimilate methanol and raffinose, growth in medium containing 60 % glucose, and growth at 42 °C. It ferments glucose but not other carbohydrates. The name Candida xylanilytica sp. nov. is proposed for this species. The type strain is KU-Xn11T ( = NBRC 106499T  = BCC 34694T  = CBS 11761T).