Xylose is a major component of lignocellulose and the second most abundant sugar present in nature. Efficient utilization of xylose is required for the development of economically viable processes to produce biofuels and chemicals from biomass. However, there are still some bottlenecks in the bioconversion of xylose, including the fact that some microorganisms cannot assimilate xylose naturally and that the uptake and metabolism of xylose are inhibited by glucose, which is usually present with xylose in lignocellulose hydrolysate. To overcome these issues, numerous efforts have been made to discover, characterize, and engineer the transporters and enzymes involved in xylose utilization to relieve glucose inhibition and to develop recombinant microorganisms to produce fuels and chemicals from xylose. Here we describe a recent advancement focusing on xylose-utilizing pathways, biosynthesis of chemicals from xylose, and engineering strategies used to improve the conversion efficiency of xylose.