Xylose reductase is involved in the first step of the fungal pentose catabolic pathway. The gene encoding xylose reductase (Texr) was isolated from the thermophilic fungus Talaromyces emersonii, expressed in Escherichia coli and purified to homogeneity. Texr encodes a 320 amino acid protein with a molecular weight of 36 kDa, which exhibited high sequence identity with other xylose reductase sequences and was shown to be a member of the aldoketoreductase (AKR) superfamily with a preference for reduced nicotinamide adenine dinucleotide phosphate (NADPH) as coenzyme. Given the potential application of xylose reductase enzymes that preferentially utilize the reduced form of nicotinamide adenine dinucleotide (NADH) rather than NADPH in the fermentation of five carbon sugars by genetically engineered microorganisms, the coenzyme selectivity of TeXR was altered by site-directed mutagenesis. The TeXRK271R+N273D double mutant displayed an altered coenzyme preference with a 16-fold improvement in NADH utilization relative to the wild type and therefore has the potential to reduce redox imbalance of xylose fermentation in recombinant S. cerevisiae strains. Expression of Texr was shown to be inducible by the same carbon sources responsible for the induction of genes encoding enzymes relevant to lignocellulose hydrolysis, suggesting a coordinated expression of intracellular and extracellular enzymes relevant to hydrolysis and metabolism of pentose sugars in T. emersonii in adaptation to its natural habitat. This indicates a potential advantage in survival and response to a nutrient-poor environment.