This study evaluated the ability of a yeast strain isolated from traditional fermented tea leaves (Camellia sinensis var. assamica), Miang from northern Thailand, to grow and produce ethanol in the presence of tannin. Among 43 Miang samples, 25 yeast isolates displayed gas-forming character in the presence of 1% (w/v) tannin, but only ML1-1 and ML1-2 isolates were confirmed as ethanol-producing yeast capable of tannin tolerance. These isolates were further identified to be Pichia occidentalis and Saccharomyces cerevisiae, respectively, based on D1/D2 domain sequence analysis. S. cerevisiae ML1-2 was selected for further studies and exhibited growth at 20–35 °C, pH 4–7, and tolerance to high sugar concentrations of up to 350 g/L. Supplementation of 1% (w/v) tannin had no effect on sugar utilization and ethanol production, while delayed sugar consumption and ethanol production were observed in the reference strain S. cerevisiae TISTR 5088. However, 5 and 10% (w/v) tannin showed inhibitory effects on the growth and ethanol production of the selected yeast isolates. During the fermentation under high tannin conditions derived by mixing Java plum fruit with ground seed, S. cerevisiae ML1-2 showed significant advantages in growth and enhanced the content of ethanol, polyphenols, tannin, and flavonoids compared to S. cerevisiae TISTR 5088. This indicated its potential for high-tannin substrate-based bioconversion for the production of either fuel ethanol or functional alcoholic beverages.