BACKGROUND: There has been a great deal of interest in fuel productions from lignocellulosic biomass to minimize the conflict between food and fuel use. The bioconversion of xylose, which is the second most abundant sugar present after glucose in lignocellulosic biomass, is important for the development of cost effective bioprocesses to fuels. Rhodococcus opacus PD630, an oleaginous bacterium, accumulates large amounts of triacylglycerols (TAGs), which can be processed into advanced liquid fuels. However, R. opacus PD630 does not metabolize xylose.RESULTS: We generated DNA libraries from a Streptomyces bacterium capable of utilizing xylose and introduced them into R. opacus PD630. Xsp8, one of the engineered strains, was capable of growing on up to 180 g L-1 of xylose. Xsp8 grown in batch-cultures derived from unbleached kraft hardwood pulp hydrolysate containing 70 g L-1 total sugars was able to completely and simultaneously utilize xylose and glucose present in the lignocellulosic feedstock, and yielded 11.0 g L-1 of TAGs as fatty acids, corresponding to 45.8% of the cell dry weight. The yield of total fatty acids per gram of sugars consumed was 0.178 g, which consisted primarily of palmitic acid and oleic acid. The engineered strain Xsp8 was introduced with two heterologous genes from Streptomyces: xylA, encoding xylose isomerase, and xylB, encoding xylulokinase. We further demonstrated that in addition to the introduction and the concomitant expression of heterologous xylA and xylB genes, there is another molecular target in the R. opacus genome which fully enables the functionality of xylA and xylB genes to generate the robust xylose-fermenting strain capable of efficiently producing TAGs at high xylose concentrations.CONCLUSION: We successfully engineered a R. opacus strain that is capable of completely utilizing high concentrations of xylose or mixed xylose/glucose simultaneously, and substantiated its suitability for TAG production. This study demonstrates that the engineered strain possesses a key trait of converters for lipid-based fuels production from lignocellulosic biomass.