Clostridium thermocellum is a thermophilic, obligately anaerobic bacterium and an ideal candidate for bioconversion of cellulosic biomass into ethanol through consolidated bioprocessing. Ethanol tolerance is one of the important parameters concerning process economics. Consolidated bioprocessing (CBP) using C. thermocellum provides single-step direct microbial conversion for large-scale bioethanol production. In this study, CBP of cassava stem waste was explored for bioethanol production using C. thermocellum ATCC 31,924. Initially, cassava stem waste was pretreated with dilute alkali (1–3% w/v NaOH; 120 °C; 30–60 min), which led to a maximum of 71.50 ± 1.04% lignin removal with 67.22 ± 0.80% holocellulose recovery. Furthermore, to improve the ethanol tolerance of C. thermocellum, chemical mutagenesis followed by adaptive laboratory evolution (ALE) was carried out for 120 days. After the ALE period, ethanol tolerance of C. thermocellum (ALE mutant) was improved from 3% (v/v) to a maximum of 5%. Finally, ALE mutant C. thermocellum was investigated for bioethanol production via CBP using a mixture of cellobioses, xylose sugars, and alkali-treated cassava stem residue. It was found that fermentation of 6.12 ± 0.18 g/L sugars by ALE mutant of C. thermocellum produced 1.35 ± 0.02 g/L bioethanol with 49.30% fermentation efficiency. Meanwhile, CBP fermentation of cassava stem hydrolysate with ALE mutant of C. thermocellum produced 7.84 ± 0.31 g/L bioethanol with 62.37 ± 0.25% cellulose conversion efficiency.