Aims: The objective of this study was to develop a mutant from Pichia stipitis NRRL Y-7124, tolerant of high concentrations of acetic acid and other inhibitory components present in acid hydrolysates, to improve ethanol yield and productivity. Methods and Results: The mutant was developed through adaptation in acid hydrolysate supplemented with nutrients and minerals at 30 0á5°C. When it was tested for its ability to ferment acid hydrolysate, it showed shorter fermentation time, better tolerance to acid and could ferment at lower pH. The ethanol yield (Y p/s ) and productivity (Q p ) were increased 1á6-and 2á1-fold, respectively. Conclusions: The development of a mutant and its tolerance to acetic acid present in hydrolysates is described. The selected mutant is capable of fermenting both hexoses and pentoses present in hydrolysate at lower pH in comparison with the parent strain. Signi®cance and Impact of the Study: The mutant could play a signi®cant role in reducing environmental pollution by using sugars present in pulp mill ef¯uent and, at the same time, could produce a marketable liquid fuel ethanol.