Saccharomyces cerevisiae, industrial yeast isolate, has been of great interest in recent years for fuel ethanol production. The ethanol yield and productivity depend on many inhibitory factors during the fermentation process such as temperature, ethanol, compounds released as the result of pretreatment procedures, and osmotic stress. An ideal strain should be able to grow under different stress conditions occurred at different fermentation steps. Development of tolerant yeast strains can be achieved by reprogramming pathways supporting the ethanol metabolism by regulating the energy balance and detoxicification processes. Complex gene interactions should be solved for an in-depth comprehension of the yeast stress tolerance mechanism. Genetic engineering as a powerful biotechnological tool is required to design new strategies for increasing the ethanol fermentation performance. Upregulation of stress tolerance genes by recombinant DNA technology can be a useful approach to overcome inhibitory situations. This review presents the application of several genetic engineering strategies to increase ethanol yield under different stress conditions including inhibitor tolerance, ethanol tolerance, thermotolerance, and osmotolerance.