The increasing challenges on gradual depletion of fossil fuel and global warming are driving the development of alternative fuels and utilization of bioenergy. Production of fuel ethanol from lignocellulosic feedstocks including a variety of agricultural and forestry residues has received increasing interests in recent years. Saccharomyces cerevisiae is the most commonly used microbial organism for ethanol production. However, it cannot efficiently assimilate xylose, which is the most abundant pentose in lignocellulosic hydrolysates. Therefore, construction and optimization of xylose utilizing S. cerevisiae is of great importance for improving economic cellulosic ethanol production. The construction and optimization of recombinant S. cerevisiae strains by integrating xylose utilization pathway, and the effect of xylose transport on xylose assimilation were summarized. Furthermore, the current status of cellulosic ethanol production using the recombinant S. cerevisiae strains was discussed, and further prospects on improvement of production efficiency of cellulosic ethanol was provided. Currently, the yield of ethanol from xylose by the recombinant strains has been improved significantly. However, the regulatory mechanisms of xylose metabolism remain unclear, which limits further optimization of production efficiency. In addition, the evaluation of fermentation performance of the recombinant strains using various lignocellulosic hydrolysates is limited. Future studies will be focused on the regulation of xylose metabolism in the recombinant strains, and the influence of various inhibitors in the hydrolysates on fermentation performance will be emphasized. Strain optimization will be further explored in combination with different fermentation processes, and economic production of celluosic ethanol using the efficient recombinant stain is expected to be achieved.