2-Phenylethanol (2-PE) is an important flavor compound but also impairs cell growth severely, which in turn blocks its bioproduction. However, the molecular mechanism of 2-PE tolerance is unclear. In this study, a superb 2-PE stress-tolerant and producing yeast, Candida glycerinogenes, was selected to uncover the underlying mechanism of 2-PE tolerance. We discovered that Hap5 is an essential regulator to 2-PE resistance, and its induction by 2-PE stress occurs at the post-transcriptional level, rather than at the transcriptional level. Under 2-PE stress, Hap5 is activated and imported into the nucleus rapidly. Then, the nuclear Hap5 binds to the glutathione synthetase (gsh2) promoter via CCAAT box, to induce the expression of gsh2 gene. The increased gsh2 expression contributes to enhanced cellular glutathione content, and consequently alleviates ROS accumulation, lipid peroxidation, and cell membrane damage caused by 2-PE toxicity. Specifically, increasing the expression of gsh2 is effective in improving not just 2-PE tolerance (33.7% higher biomass under 29 mM 2-PE), but also 2-PE production (16.2% higher). This study extends our knowledge of 2-PE tolerance mechanism and also provides a promising strategy to improve 2-PE production.