Interest in protein engineering for the enzymatic production of valuable products, such as pharmaceutical compounds and biofuels, is growing rapidly. The cold-active acetyl xylan esterase from Paenibacillus sp. (PbAcE) presents unusually broad substrate specificity. Here, we engineered a hydrophobic substrate-binding pocket to enable the accommodation of relatively large alcohol substrates, such as linalyl acetate and α-terpinyl acetate. To identify candidate residues for engineering, we performed covalent docking of substrates to the Ser185 active site using the HCovDock program. Functional hotspots were analyzed using HotSpot Wizard 3.1. Lys91, His93, and Tyr182 were selected for site-saturation mutagenesis (SSM). After generating the SSM mutant library, a qualitative colorimetric assay was conducted to identify positive mutants. Three, two, and five single mutants were selected for Lys91, His93, and Tyr182, respectively. The best single mutants were then sequentially combined to generate double and triple mutants. Single mutants exhibited a 10–30% increase in activity compared to that of wild-type PbAcE, while no significant synergistic improvements were observed in the double and triple mutants. The increase in activity against both linalyl acetate and α-terpinyl acetate was similar. Mutation did not affect the acetyl binding and catalysis. Further research on the acetyl binding pocket will provide insights into substrate specificity and aid in efficient biocatalyst development for industrial applications.