Saccharomyces cerevisiae is traditionally used for alcoholic beverage and bioethanol production; however, its performance during fermentation is compromised by the impact of ethanol accumulation on cell vitality. This article reviews studies into the molecular basis of the ethanol stress response and ethanol tolerance of S. cerevisiae; such knowledge can facilitate the development of genetic engineering strategies for improving cell performance during ethanol stress. Previous studies have used a variety of strains and conditions, which is problematic, because the impact of ethanol stress on gene expression is influenced by the environment. There is however some commonality in Gene Ontology categories affected by ethanol assault that suggests that the ethanol stress response of S. cerevisiae is compromised by constraints on energy production, leading to increased expression of genes associated with glycolysis and mitochondrial function, and decreased gene expression in energy-demanding growth-related processes. Studies using genome-wide screens suggest that the maintenance of vacuole function is important for ethanol tolerance, possibly because of the roles of this organelle in protein turnover and maintaining ion homoeostasis. Accumulation of Asr1 and Rat8 in the nucleus specifically during ethanol stress suggests S. cerevisiae has a specific response to ethanol stress although this supposition remains controversial.