The Italian cigar manufacturing process includes a fermentation step that leads to accumulation of nitrite and tobacco-specific nitrosamines (TSNA), undesirable by-products due to their negative impact on health. In this study, growth and biochemical properties of Debaryomyces hansenii TOB-Y7, a yeast strain that predominates during the early phase of fermentation, have been investigated. With respect to other D. hansenii collection strains (Y7426, J26, and CBS 1796), TOB-Y7 was characterized by the ability to tolerate very high nitrite levels and to utilize nitrite, but not nitrate, as a sole nitrogen source in a chemically defined medium, a property that was enhanced in microaerophilic environment. The ability to assimilate nitrite was associated to the presence of YNI1, the gene encoding the assimilatory NAD(P)H:nitrite reductase (NiR), absent in Y7426, J26, and CBS 1796 by Southern blot data. YNI1 from TOB-Y7 was entirely sequenced, and its expression was analyzed in different media by Northern blot and reverse transcriptase polymerase chain reaction. The evidence that, in D. hansenii TOB-Y7, YNI1 was transcriptional active also in the presence of high ammonia concentration typical of tobacco fermentation, stimulated the development of an improved process that, on a laboratory scale, was proved to be effective in minimizing nitrite and TSNA accumulation.