Rhodotorula species have been isolated from a wide variety of environmental sources as diverse as active deep sea volcanoes and wastewater treatment areas and are associated with a range of plant species. R. graminis is a unicellular, pink-pigmented yeast species. Strain WP1 was isolated as an endophyte along with an assortment of bacteria within Populus trichocarpa (black cottonwood) growing in its native environment beside the Snoqualmie River in Western Washington state. Endophytes are microorganisms that live within plants without causing disease while generally providing growth benefits to the plant. Strain WP1 produces indole-3-acetic acid, a plant growth hormone and enhances growth of several different plant species. As an endophyte, WP1 is well-adapted to the plant environment, giving it several useful characteristics for biofuel and biochemical production. WP1 utilizes hexose as well as pentose sugars, produces high levels of the sugar alcohol, xylitol, and is resistant to several phytochemicals known to inhibit industrial yeast strains. Sequencing of the genome of strain WP1 should enable researchers to identify genes involved in pentose sugar metabolism as well as genes associated with plant-microbe interactions and plant growth promotion.