Also known as birch sugar
Xylitol is a polyol. It is present naturally at low levels in raspberries, plums, and some other fruits. It was first produced for food use in Finland from birch trees. It is now produced commercially from additional sources such as corn and sugar cane stalks.
Xylitol is about equal in sweetness to sucrose. It also produces a cooling feeling in the mouth. It is used primarily in chewing gums and confections.
Xylitol is only partly absorbed by the body, and not converted to energy very efficiently. Its caloric value depends on several factors, as discussed in my essay "Polyols and Calories." In the USA and in the European Union, xylitol provides 2.4 calories per gram for labeling purposes.
Xylitol is stable over the range of pH found in foods. It is also heat-stable. It is quite soluble in water (0.64 g per mL).
Xylitol has been approved by the US Food and Drug Administration, the Joint Expert Committee on Food Additives (JECFA), and the European Union. Unabsorbed xylitol can cause some digestive system unhappiness, including gas, rumbling sounds (borborygmus), and diarrhea. You can read about this in my essay, "Polyols--Digestive Issues."
Xylitol is toxic to dogs--don't leave your sugar-free gum around!