In order to construct a yeast strain having high ethanol tolerance together with good lactose fermentation ability, the protoplast fusion using Saccharomyces cerevisiae STV 89 and Kluyveromyces fragilis CBS 397 was carried out. Auxotrophic mutants of K. fragilis were obtained as a selection marker by treatment of ethylmethane sulfonate. The best mutant for protoplast fusion was selected based on the capabilities of ${eta}-galactosidase$ production and lactose fermentation. The protoplast fusion using polyethylene glycol and calcium chloride solution led to the fusion frequence of $3{ imes}10^{-6}$ and a number of fusants were obtained. Among these fusants, a fusant F-3-19 showed the best results in terms of ethanol tolerance, ${eta}-galactosidase$ activity and lactose fermentation. The performance of lactose fermentation and ethanol tolerance by this fusant were better than those of K. fragilis. Study on the ethanol tolerance having relation to fatty acid composition and intracellular ethanol concentration revealed that the fusant F-3-19 had a higher unsaturated fatty acids content and accumulated less amount of intracellular ethanol compared with a parent of K. fragilis.