Solvent toxicity to producing microorganisms is one of the key stress elements during ethanol and butanol production by microbial fermentation. Furthermore, ethanol and butanol inhibit microbial growth and even cause cell death when the concentration reaches a certain value. Improvement of solvent tolerance of these microorganisms is important for industrial applications. Research on the ethanol and butanol tolerance mechanisms of microorganisms can provide basis for breeding of producing strains with improved solvent tolerance. In this paper, we reviewed ethanol and butanol tolerance mechanisms of microorganisms. The opportunities and challenges in the applications for biofuel and biotransformation are also discussed.