Methods of identifying genes conferring ethanol tolerance in yeasts, genes that confer ethanol tolerance, and mutant strains used to identify such genes are described. A gene herein designated HpETT1 was isolated from the yeast Hansenula polymorpha. Expression of HpETT1 in an ethanol sensitive mutant H. polymorpha strain designated 7E complimented ethanol sensitivity of the mutant. When multiple copies of the HpETT1 were integrated into the genome and overexpressed, the transformed strain demonstrated approximately 10-fold greater resistance to ethanol and resistance to the protein misfolding agent AZC. Expression of HpETT1 also increased ethanol tolerance in Saccharomyces cerevisiae. HpEtt1 has 39% sequence identity to a previously identified protein from S. cerevisiae denoted MPE1, however, the MPE1 gene does not confer ethanol resistance to the 7E mutant. Another gene from the yeast Pichia stipites was identified that encodes an orthologue protein having 37% identity to HpETT1 herein designated PsETT1 and also confers ethanol resistance to the 7E mutant.