To develop a cost‐effective microbial cell factory for the production of biofuels and biochemicals, an understanding of tolerant mechanisms is vital for the construction of robust host strains. Here, we characterized a new function of a key metabolic transcription factor named Znf1 and its involvement in stress response in Saccharomyces cerevisiae to enhance tolerance to advanced biofuel, isobutanol. RNA‐sequencing analysis of the wild‐type versus the znf1Δ deletion strains in glucose revealed a new role for transcription factor Znf1 in the pentose phosphate pathway (PPP) and energy generation. The gene expression analysis confirmed that isobutanol induces an adaptive cell response, resulting in activation of ATP1‐3 and COX6 expression. These genes were Znf1 targets that belong to the electron transport chain, important to produce ATPs. Znf1 also activated PPP genes, required for the generation of key amino acids, cellular metabolites, and maintenance of NADP/NADPH redox balance. In glucose, Znf1 also mediated the upregulation of valine biosynthetic genes of the Ehrlich pathway, namely ILV3, ILV5, and ARO10, associated with the generation of key intermediates for isobutanol production. Using S. cerevisiae knockout collection strains, cells with deleted transcriptional regulatory gene ZNF1 or its targets displayed hypersensitivity to isobutanol and acid inhibitors; in contrast, overexpression of ZNF1 enhanced cell survival. Thus, the transcription factor Znf1 functions in the maintenance of energy homeostasis and redox balance at various checkpoints of yeast metabolic pathways. It ensures the rapid unwiring of gene transcription in response to toxic products/by‐products generated during biofuel production. Importantly, we provide a new approach to enhance strain tolerance during the conversion of glucose to biofuels.