Aims: Toddy, an alcoholic beverage produced from naturally fermented date palm sap and commonly used as traditional drink in Southern India including Odisha, is a source of natural yeasts, capable of fermenting sugar to alcohol. The present study was carried out to isolate and identify predominant yeast strains from toddy, fermented date palm sap and to evaluate their ethanol tolerance and comparative bioethanol production capacity to select potential yeast strains for efficient bioethanol production for their application in fermentation industry. Methodology and results: Eight morphologically distinct yeast isolates (BS1-BS8) were identified on the basis of morphological and biochemical characterization. The yeasts identified include four strains of Saccharomyces cerevisiae, one strain each of Pichia besseyi and Trycosporon capitatum and two strains of Candida albicans. The strains were evaluated for their ethanol tolerance capacity in in vitro condition. The strains P. besseyi (BS2) and S. cerevisiae (BS7) tolerated ethanol concentration up to 10% (v/v), while two isolated S. cerevisiae strains (BS1 and BS5) showed tolerance up to 9% of ethanol concentration. The remaining two strains showed tolerance of 7% (v/v). The identified strains along with commercial yeast strain (S. cerevisiae, CTCRI) were evaluated for comparative bioethanol production capacity in different carbohydrate substrates (grape juice, mahua flower extract, molasses, sugarcane juice and saccharified sweet potato root flour broth). Taking different strains and substrate conditions into account, strain P. besseyi (BS2) showed in overall the highest ethanol production capacity followed by the strains of S. cerevisiae (BS5, CTCRI, BS2 and BS7 in an order of their performance). On the other hand strains of C. albicans (BS4 and BS6) and T. capitatum (BS3) exhibited least ethanol production capacity. Conclusion, significance and impact study: In conclusion, the present research work characterizes eight yeast strains isolated from fermented date palm sap (toddy) by conventional morphological and biochemical methods and identified them as four species of Saccharomyces cerevisiae, two strains of C. albicans and one strain each of P. besseyi and T. capitatum. The isolate P. besseyi showed very high ethanol tolerance and production capacity with some promising fermentation capacity towards different substrates compared to commercial yeast strain S. cerevisiae.