The focus on de veloping new renewable energy in the transportation sector by the EU has boosted the production of biodiesel from rapeseed and other vegetable oils in Europe. This has led to an immense increase in the production of glycerol, which is an inevitable byproduct from the biodiesel production process. Since the volume of the glycerol by-product has exceeded the current market need, biodiesel producers are looking for new methods for sustainable glycerol management and improving the competitiveness of the biodiesel industries. The EU Commission funded GLYFINERY project is one initiative targeted to development of a novel technology based on biological conversion of the glycerol feedstocks into known and new advanced liquid biofuels, bioenergy and valuable green chemicals in an integrated biorefinery concept. As part of the GLYFINERY project, the objective of this PhD project was to develop a process for bioconversion of waste glycerol into biofuel ethanol, characterize and optimize the process. The present thesis comprises of eight chapters. The project background, scope and aims are introduced in Chapter 1. Besides, the related background knowledge for better understanding the studies in the following chapters is also introduced in this chapter. Chapter 2-7 are comprised of the experimental results obtained during the whole PhD study. The well characterized yeast Saccharomycees cerevisiae has been used for fermentation of alcoholic beverages throughout thousands of years of human history, and is applied in many areas of modern biotechnology. In this project the interest was in investigating nonconventional yeasts which had the capability of conversion of glycerol primarily to liquid biofuels. Chapter 2 i s about the initial results for screening of the potential candidates for glycerol fermentation. Two candidates Pachia pastoris and Pachysolen tannophilus were shown to be capable of producing ethanol with glycerol as the sole carbon source. After growth comparison on glycerol and tests for extracellular metabolites in agitated flasks, P. tannophilus was selected as the object of further studiesfor conversion of glycerol to ethanol. In chapter 3, ph ysiology studies in lab scale fermentation of the ethanol production process with P. tannophilus were investigated on glycerol. The effect of aeration, pH and nitrogen source was studied for improving the ethanol production and yield and designing a competitive ethanol production process. The ethanol tolerance of P. tannophilus on glycerol was studied for further characterizing the ethanol production process. A growth comparison on crude glycerol and pure glycerol was performed to test if the impurities in the crude glycerol inhibit the growth of P. tannophilus and affect product formation. Based on optimized parameters, 28.1 g/L ethanol was produced by a staged batch process, which was the maximum achieved so far for conversion of glycerol to ethanol by a microbial bioprocess. The physiology study of ethanol tolerance of P. tannophilus showed that the ethanol tolerance of this strain was relatively low. The low ethanol tolerance of P. tannophilus might be the factor which inhibits further improvement of ethanol production process. Chapter 4 describes adaptive evolution studies performed to enhance the ethanol tolerance of P. tannophilus on glycerol. The adapted strains isolated during the evolution process were characterised according to the ethanol tolerance, growth rate on glycerol, ethanol production and growth profile on glycerol. For better understanding the genetic background, the genomic DNA of P. tannophilus CBS4044 was isolated and sequenced. The draft genome sequencing results of P. tannophilus are summarized in chapter 5. Raw data of short reads from genome sequencing results were assembled together. The protein-coding genes were identified and the putative amino acid sequences were analysed for the gene function annotation. Pulsed field gel electrophoresis was performed to predict the chromosome numbers and approximate chromosome sizes in P. tannophilus. For the purpose of further improving the yields and production levels of ethanol produced, it would be beneficial if P. tannophilus could be genetically engineered and the ethanol synthesis pathway in P. tannophilus could be investigated. The whole-genome sequencing of P. tannophilus also makes it possible to perform genetic engineering of this strain. Chapter 6 describes the attempts to set up the transformation system in P. tannophilus in order to know more about the genetic background and further improve the ethanol production process. The commonly applied methods using antibiotic resistance and auxotrophic markers URA3 were used for transformation selection. Since the genome of P. tannophilus CBS4044 was sequenced and the mechanism behind glycerol metabolism is poorly understood in this strain. In chapter 7 focusses on studying the genes involved in glycerol metabolism in P. tannophilus, which were predicted by blasting with the sequences of genes known to have these functions in S. cerevisiae. Quantitative realtime PCR was performed to unveil the expression pattern of the genes during growth on glycerol. The glycerol metabolism and pathways in P. tannophilus are discussed. The genes involved in glycerol transport in P. tannophilus have been cloned and expressed in S. cerevisae (CEN.PK 113-5D) strains to validate the function of the predicted glycerol transporter genes. Finally, the most relevant results from all the studies during the PhD are summarised and future perspectives for continuing these studies are presented in Chapter 8.