Significant hurdles exist in efforts to domesticate and industrialize a microbial species for biotechnological application as specific metabolic functions found in natural communities disappear in axenic cultures. For the lignocellulose-deconstructing specialist Clostridium thermocellum, the catabolism of hemicellulose-derived pentoses, which the bacterium cannot ferment, is one such function. Here, we report that various xylo-oligomers significantly inhibit C. thermocellum metabolism and growth and that microbe-sugar interactions occur across multiple dimensions. First, stable isotope metabolomics confirmed C. thermocellum’s ability to transport and metabolize pentose sugars. This transport occurs, at least in part, through the ATP-dependent transporter, CbpD. Secondly, xylose is an electron sink for C. thermocellum metabolism leading to the production of xylitol. Deletion of Clo1313_0076, annotated as a xylitol dehydrogenase, reduced the total production and molar xylitol yields by 41% and 46%, respectively. However, it also altered the relative end-product distribution patterns confirming that external electron acceptors may influence the bacterium’s redox metabolism to a greater extent than previously considered. Finally, xylose-induced inhibition corresponds with the up-regulation and biogenesis of an AgrD-type, lactone cyclized pentapeptide signaling molecule; which is the first report of an AgrD-type signaling peptide in any thermophile. Addition of synthetic versions of the cyclic peptide inhibited cultures grown in the absence of xylose, but had no effect on cultures already inhibited by the pentose sugar. Together, these findings identify that C. thermocellum has evolved previously unrecognized strategies to cope with C5-sugars, but the absence of a native catabolic sink negatively affects strain metabolism and growth.