Methylobacterium extorquens AM1, which can be used as a methylotrophic cell factory (MeCF) for the production of fine chemicals from methanol, is the most extensively studied model methylotrophic strain. However, its low tolerance for methanol limits the development of bioprocesses and there have been no reports of improved methanol tolerance of M. extorquens AM1. In this study, atmospheric and room temperature plasma (ARTP) mutagenesis, in combination with adaptive laboratory evolution (ALE), is used to generate a mutant with high methanol tolerance (referred to as CLY-2533). The final cell density of CLY-2533 is 7.10 times higher than that of the wild-type strain in medium containing 5% (v/v) methanol. Through comparative genomics analysis and overexpression of the exploited putative genes, seven mutated genes are identified as being closely related to the higher methanol tolerance of CLY-2533. Additionally, the mvt operon, which contains genes related to the biosynthesis of mevalonate acid (MEV), is introduced into CLY-2533. This recombinant strain shows significant improvements in both MEV production and cell growth in 5% methanol medium. These findings will be helpful in rational design of methanol-utilizing strain for an improved host platform for methanol based biomanufacturing.