Xylitol is a low-calorie, crystalline sweetener which is naturally present in fibrous plant foods and hardwood trees. It can be produced by hydrolysis from different plant sources having polysaccharides. Hemicellulose (xylan) is transformed to xylose that is further converted into xylitol through hydrogenation. In the human body, more than half of the ingested xylitol is not absorbed in the small intestine. It moves to the gut and serves as a substrate for growth of intestinal flora. Blood glucose and insulin responses to xylitol are very low as compared to sucrose. Its energy value is calculated as 2.4 kcal/g. It is the only sugar alcohol having sweetness intensity equivalent to sucrose. Although, its solubility is comparable to sucrose at ambient temperatures and greater at higher temperatures but being a monosaccharide sugar alcohol, it shows lower viscosity than sucrose in a solution of similar concentration. Due to a low-calorific-value sweetener, it is being used as a food additive in confectionery, bakery, drinks, and dairy products, as well as in pharmaceutical industry. Xylitol imparts numerous potential health benefits, being low in calories; having insulin-independent metabolism, prebiotic nature, and anabolic effects; and being safe to use.