The interest in using non-conventional yeasts to produce value-added compounds from low cost substrates, such as lignocellulosic materials, has increased in recent years. Setting out to discover novel microbial strains that can be used in biorefineries, an Issatchenkia orientalis strain was isolated from waste cooking oil (WCO) and its capability to produce ethanol from wheat straw hydrolysate (WSHL) was analyzed. As with previously isolated I. orientalis strains, WCO-isolated I. orientalis KJ27-7 is thermotolerant. It grows well at elevated temperatures up to 42 °C. Furthermore, spot drop tests showed that it is tolerant to various chemical fermentation inhibitors that are derived from the pre-treatment of lignocellulosic materials. I. orientalis KJ27-7 is particularly tolerant to acetic acid (up to 75 mM) and tolerates 10 mM formic acid, 5 mM furfural and 10 mM hydroxymethylfurfural. Important for biotechnological cellulosic ethanol production, I. orientalis KJ27-7 grows well on plates containing up to 10% ethanol and media containing up to 90% WSHL. As observed in shake flask fermentations, the specific ethanol productivity correlates with WSHL concentrations. In 90% WSHL media, I. orientalis KJ27-7 produced 10.3 g L−1 ethanol within 24 h. This corresponds to a product yield of 0.50 g g−1 glucose (97% of the theoretical maximum) and a volumetric productivity of 0.43 g L−1 h−1. Therefore, I. orientalis KJ27-7 is an efficient producer of lignocellulosic ethanol from WSHL.