Monoterpenes can, upon hydrogenation, be used as light-fraction components of sustainable aviation fuels. Fermentative production of monoterpenes in engineered microorganisms, such as Saccharomyces cerevisiae, has gained attention as a potential route to deliver these next-generation fuels from renewable biomass. However, end product toxicity presents a formidable problem for microbial synthesis. Due to their hydrophobicity, monoterpene inhibition has long been attributed to membrane interference, but the molecular mechanism remains largely unsolved. In order to gain a better understanding of the mode of action, we analyzed the composition and structural integrity of the cell envelope as well as the transcriptional response of yeast cells treated with an inhibitory amount of d-limonene (107 mg/liter). We found no alterations in membrane fluidity, structural membrane integrity, or fatty acid composition after the solvent challenge. A 4-fold increase in the mean fluorescence intensity per cell (using calcofluor white stain) and increased sensitivity to cell wall-degrading enzymes demonstrated that limonene disrupts cell wall properties. Global transcript measurements confirmed the membrane integrity observations by showing no upregulation of ergosterol or fatty acid biosynthesis pathways, which are commonly overexpressed in yeast to reinforce membrane rigidity during ethanol exposure. Limonene shock did cause a compensatory response to cell wall damage through overexpression of several genes (ROM1, RLM1, PIR3, CTT1, YGP1, MLP1, PST1, and CWP1) involved with the cell wall integrity signaling pathway. This is the first report demonstrating that cell wall, rather than plasma membrane, deterioration is the main source of monoterpene inhibition. We show that limonene can alter the structure and function of the cell wall, which has a clear effect on cytokinesis.