This study employed cell recycling, batch adaptation, cell mating and high-throughput screening to select adapted Spathaspora passalidarum strains with improved fermentative ability. The most promising candidate YK208-E11 (E11) showed a 3-fold increase in specific fermentation rate compared to the parental strain and an ethanol yield greater than 0.45 g/g substrate while co-utilizing cellobiose, glucose and xylose. Further characterization showed that strain E11 also makes 40% less biomass compared to the parental strain when cultivated in rich media under aerobic conditions. A tetrazolium agar overlay assay in the presence of respiration inhibitors, including rotenone, antimycin A, KCN and salicylhydroxamic acid elucidated the nature of the mutational events. Results indicated that E11 has a deficiency in its respiration system that could contribute to its low cell yield. Strain E11 was subjected to whole genome sequencing and an ∼11 kb deletion was identified; the open reading frames absent in strain E11 code for proteins with predicted functions in respiration, cell division and the actin cytoskeleton, and may contribute to the observed physiology of the adapted strain. Results of the tetrazolium overlay also suggest that cultivation on xylose affects the respiration capacity in the wild-type strain, which could account for its faster fermentation of xylose as compared to glucose. These results support our previous finding that S. passalidarum has highly unusual physiological responses to xylose under oxygen limitation.