An endogenous homoethanol pathway (glucose/1.2 xylose => 2 pyruvate => 2 ethanol) was previously engineered in Escherichia coli SZ410 via eliminating acid-producing pathways and anaerobic expression of the pyruvate dehydrogenase complex (aceEF-lpd operon). This ethanologenic derivative was subsequently engineered through adaptive evolution and partial deletion of the RNase G, resulting in an improved strain of E. coli RM10 for ethanol production using C6 and C5 sugars. Nevertheless, compared to the ethanol tolerance and/or ethanol titer achieved by industrial yeast, further incremental improvement of RM10 was needed for ethanol production using cellulosic biomass derived C6 and C5 sugars. In this study, the role of aldB gene (encoding for acetaldehyde dehydrogenase, AldB, which oxidizes acetaldehyde to acetic acid) was evaluated for ethanol/acetaldehyde tolerance and xylose fermentation by RM10. Deletion of aldB gene decreased ethanol tolerance, fermentative cell growth and ethanol production from xylose; while overexpression of aldB gene improved fermentative cell growth, and increased ethanol production from xylose. The improvement is likely attributed to preventing acetaldehyde accumulation (a toxic intermediate of homoethanol pathway) via AldB catalyzed oxidation.