Technical Abstract: Renewable lignocellulosic materials are attractive low-cost feedstocks for bioethanol production. Furfural and 5-hydroxymethylfurfural (HMF) are among the most potent inhibitory compounds generated from acid hydrolysis of lignocelluloses to simple sugars for fermentation. We evaluated Saccharomyces cerevisiae strain ATCC 211239, NRRL Y-12632, and Pichia stipitis strain NRRL-7124 and found furfural and HMF inhibition were dose-dependent at concentrations from 10 to 120 mM. The yeast strains were more sensitive to furfural inhibition than HMF at the same concentration while the combined treatment of furfural and HMF synergistically suppressed cell growth. A metabolite transformed from HMF by strain NRRL Y-12632 was isolated from culture supernatant and conclusively identified as 2, 5-bis-hydroxymethylfuran, a previously postulated HMF alcohol, with a molecular weight of 128. Therefore, we propose that in the presence of HMF, yeast reduce the aldehyde group on the furan ring of HMF to an alcohol, in a similar manner as for furfural. The accumulation of this biotransformed metabolite may be less toxic to yeast cultures than HMF as evidenced by the rapid yeast fermentation and growth rates once the HMF conversion has been completed. The ability of yeast to adapt to and transform furfural and HMF offers the potential for in situ detoxification of these inhibitors and suggests a genetic basis for further development of highly tolerant strains for biofuel production.