Lignin degradation products are toxic to microorganisms, which is one of the bottlenecks for fuel ethanol production. We studied the effects of phenolic ketones (4-hydroxyacetophenone, 4-hydroxy-3-methoxy-acetophenone and 4-hydroxy-3,5-dimethoxy-acetophenone) derived from lignin degradation on ethanol fermentation of xylose and cellular lipid composition of Pichia stipitis NLP31. Ethanol and the cellular fatty acid of yeast were analyzed by high performance liquid chromatography (HPLC) and gas chromatography/mass spectrometry (GC/MS). Results indicate that phenolic ketones negatively affected ethanol fermentation of yeast and the lower molecular weight phenolic ketone compound was more toxic. When the concentration of 4-hydroxyacetophenone was 1.5 g/L, at fermentation of 24 h, the xylose utilization ratio, ethanol yield and ethanol concentration decreased by 42.47%, 5.30% and 9.76 g/L, respectively, compared to the control. When phenolic ketones were in the medium, the ratio of unsaturated fatty acids to saturated fatty acids (UFA/SFA) of yeast cells was improved. When 1.5 g/L of three aforementioned phenolic ketones was added to the fermentation medium, the UFA/SFA ratio of yeast cells increased to 3.03, 3.06 and 3.61, respectively, compared to 2.58 of the control, which increased cell membrane fluidity and instability. Therefore, phenolic ketones can reduce the yeast growth, increase the UFA/SFA ratio of yeast and lower ethanol productivity. Effectively reduce or remove the content of lignin degradation products is the key to improve lignocellulose biorefinery.