Production of bioethanol using starch as raw material has become a very prominent technology. However, phytate in the raw material not only decreases ethanol production efficiency, but also increases phosphorus discharge. In this study, to decrease phytate content in an ethanol fermentation process, Saccharomyces cerevisiae was engineered for heterologous expression of phytase on the cell surface. The phy gene encoding phytase gene was fused with the C-terminal-half region of α-agglutinin and then inserted downstream of the secretion signal gene, to produce a yeast surface-display expression vector pMGK-AG-phy, which was then transformed into S. cerevisiae. The recombinant yeast strain, PHY, successfully displayed phytase on the surface of cells producing 6.4 U/g wet cells and its properties were further characterized. The growth rate and ethanol production of the PHY strain were faster than the parent S. cerevisiae strain in the fermentation medium by simultaneous saccharification and fermentation. Moreover, the phytate concentration decreased by 91% in dry vinasse compared to the control. In summary, we constructed recombinant S. cerevisiae strain displaying phytase on the cell surface, which could effectively reduce the content of phytate, improve the utilization value of vinasse and reduce the discharge of phosphorus. The strain reported here represents a useful novel engineering platform for developing an environment-friendly system for bioethanol production from a corn substrate.