The mechanisms underlying ethanol and heat tolerance are complex. Many different genes are involved, and the exact basis is not fully understood. The integrity of cytoplasmic and mitochondrial membranes is critical to maintain proton gradients for metabolic energy and nutrient uptake. Heat and ethanol stress adversely affect membrane integrity. These factors are particularly detrimental to xylose-fermenting yeasts because they require oxygen for biosynthesis of essential cell membrane and nucleic acid constituents, and they depend on respiration for the generation of ATP. Physiological responses to ethanol and heat shock have been studied most extensively in S. cerevisiae. However, comparative biochemical studies with other organisms suggest that similar mechanisms will be important in xylose-fermenting yeasts. The composition of a cell's membrane lipids shifts with temperature, ethanol concentration, and stage of cultivation. Levels of unsaturated fatty acids and ergosterol increase in response to temperature and ethanol stress. Inositol is involved in phospholipid biosynthesis, and it can increase ethanol tolerance when provided as a supplement. Membrane integrity determines the cell's ability to maintain proton gradients for nutrient uptake. Plasma membrane ATPase generates the proton gradient, and the biochemical characteristics of this enzyme contribute to ethanol tolerance. Organisms with higher ethanol tolerance have ATPase activities with low pH optima and high affinity for ATP. Likewise, organisms with ATPase activities that resist ethanol inhibition also function better at high ethanol concentrations. ATPase consumes a significant fraction of the total cellular ATP, and under stress conditions when membrane gradients are compromised the activity of ATPase is regulated. In xylose-fermenting yeasts, the carbon source used for growth affects both ATPase activity and ethanol tolerance. Cells can adapt to heat and ethanol stress by synthesizing trehalose and heat-shock proteins, which stabilize and repair denatured proteins. The capacity of cells to produce trehalose and induce HSPs correlate with their thermotolerance. Both heat and ethanol increase the frequency of petite mutations and kill cells. This might be attributable to membrane effects, but it could also arise from oxidative damage. Cytoplasmic and mitochondrial superoxide dismutases can destroy oxidative radicals and thereby maintain cell viability. Improved knowledge of the mechanisms underlying ethanol and thermotolerance in S. cerevisiae should enable the genetic engineering of these traits in xylose-fermenting yeasts.