<P>Algae are referred to as a third-generation biomass for ethanol production. However, salinity treatment is a problem that needs to be solved, because algal hydrolysates often contain high salt. Here, we isolated the salt-tolerant ethanol-producing yeast <I>Citeromyces matritensis</I> M37 from the east coast of Miura Peninsula in Japan. This yeast grew under osmotic stress conditions (20% NaCl or 60% glucose). It produced 6.55 g/L ethanol from YPD medium containing 15% NaCl after 48 h, and the ethanol accumulation was observed even at 20% NaCl. Using salted <I>Undaria pinnatifida</I> (wakame), we obtained 6.33 g/L glucose from approx. 150 g/L of the salted wakame powder with acidic and heat pretreatment followed by enzymatic saccharification, and the ethanol production reached 2.58 g/L for <I>C.</I><I>matritensis</I> M37. The ethanol concentration was 1.4 times higher compared with that using the salt-tolerant ethanol-producing yeast <I>Zygosaccharomyces rouxii</I> S11.</P>