The xylose-fermenting yeast Spathaspora passalidarum showed excellent fermentation performance utilizing glucose and xylose under anaerobic conditions. But this yeast is highly sensitive to the inhibitors such as furfural present in the pretreated lignocellulosic biomass. In order to improve the inhibitor tolerance of this yeast, a combination of UV mutagenesis and protoplast fusion was used to construct strains with improved performance. Firstly, UVinduced mutants were screened and selected for improved tolerance towards furfural. The most promised mutant, S. passalidarum M7, produced 50% more final ethanol than the wild-type strain in a synthetic xylose medium containing 2 g/l furfural. However, this mutant was unable to grow in a medium containing 75% liquid fraction of pretreated wheat straw (WSLQ), in which furfural and many other inhibitors were present. Hybrid yeast strains, obtained from fusion of the protoplasts of S. passalidarum M7 and a robust yeast, Saccharomyces cerevisiae ATCC 96581, were able to grow in 75% WSLQ and produce around 0.4 g ethanol/g consumed xylose. Among the selected hybrid strains, the hybrid FS22 showed the best fermentation capacity in 75% WSLQ. Phenotypic and partial molecular analysis indicated that S. passalidarum M7 was the dominant parental contributor to the hybrid. In summary, the hybrids are characterized by desired phenotypes derived from both parents, namely the ability to ferment xylose from S. passalidarum and an increased tolerance to inhibitors from S. cerevisiae ATCC 96581.