The economical and efficient commercial production of second-generation bioethanol requires fermentation microorganisms capable of entirely and rapidly utilizing all sugars in lignocellulosic hydrolysates. In this study, we developed a recombinant Saccharomyces cerevisiae strain, BLH510, through protoplast fusion and metabolic engineering to enhance its ability to co-ferment glucose, xylose, cellobiose, and xylooligosaccharides while tolerating various inhibitors commonly found in lignocellulosic hydrolysates. The parental strains, LF1 and BLN26, were selected for their superior glucose/xylose co-fermentation capabilities and inhibitor tolerance, respectively. The fusion strain BLH510 demonstrated efficient utilization of mixed sugars and high ethanol yield under oxygen-limited conditions. Under low inoculum conditions, strain BLH510 could completely consume all four kinds of sugars in the medium within 84 h. The fermentation produced 33.96 g/L ethanol, achieving 84.3% of the theoretical ethanol yield. Despite the challenging presence of mixed inhibitors, BLH510 successfully metabolized all four sugars above after 120 h of fermentation, producing approximately 30 g/L ethanol and reaching 83% of the theoretical yield. Also, strain BLH510 exhibited increased intracellular trehalose content, particularly under conditions with mixed inhibitors, where the intracellular trehalose reached 239.3 mg/g yeast biomass. This elevated trehalose content contributes to the enhanced stress tolerance of BLH510. The study also optimized conditions for protoplast preparation and fusion, balancing high preparation efficiency and satisfactory regeneration efficiency. The results indicate that BLH510 is a promising candidate for industrial second-generation bioethanol production from lignocellulosic biomass, offering improved performance under challenging fermentation conditions. Our work demonstrates the potential of combining protoplast fusion and metabolic engineering to develop superior S. cerevisiae strains for lignocellulosic bioethanol production. This approach can also be extended to develop robust microbial platforms for producing a wide array of lignocellulosic biomass-based biochemicals.