To obtain strains that are able to efficiently produce ethanol from different carbohydrates, mainly cellulose hydrolysates, several species of the genus Candida and a Zygosaccharomyces fermentati strain were examined for their ability to utilize cellobiose and produce ethanol, as well as for their thermotolerance and the possibility of genetic manipulation. Candida obtusa and Zygosaccharomyces fermentati tolerated the maximal temperature for growth, possessed the highest cellobiase activity, and offered the possibility of genetic manipulation, although neither of them proved to be a good producer of ethanol. Intergeneric hybrids of Saccharomyces cerevisiae and Z. fermentati were obtained after protoplast fusion. They were selected as prototrophic strains, after isolation of auxotrophic mutants from Z. fermentati and fusion with an S. cerevisiae strain which was also auxotrophic. The hybrids, which appeared at a frequency of 2 X 10(-7), presented characteristics of both parents, such as resistance to certain drugs and the ability to grow with either cellobiose or lactic acid as the sole carbon source; they were very stable, even under nonselective conditions. These hybrids may have important industrial applications as good fermenting strains.