BACKGROUND: Microbial production of chemicals from renewable carbon sources enables a sustainable route to many bioproducts. Sugar streams, such as those derived from biomass pretreated with ionic liquids (IL), provide efficiently derived and cost-competitive starting materials. A limitation to this approach is that residual ILs in the pretreated sugar source can be inhibitory to microbial growth and impair expression of the desired biosynthetic pathway. RESULTS: We utilized laboratory evolution to select Escherichia coli strains capable of robust growth in the presence of the IL, 1-ethyl-3-methyl-imidizolium acetate ([EMIM]OAc). Whole genome sequencing of the evolved strain identified a point mutation in an essential gene, cydC, which confers tolerance to two different classes of ILs at concentrations that are otherwise growth inhibitory. This mutation, cydC-D86G, fully restores the specific production of the bio-jet fuel candidate D-limonene, as well as the biogasoline and platform chemical isopentenol, in growth medium containing ILs. Similar amino acids at this position in cydC, such as cydC-D86V, also confer tolerance to [EMIM]OAc. We show that this [EMIM]OAc tolerance phenotype of cydC-D86G strains is independent of its wild-type function in activating the cytochrome bd-I respiratory complex. Using shotgun proteomics, we characterized the underlying differential cellular responses altered in this mutant. While wild-type E. coli cannot produce detectable amounts of either product in the presence of ILs at levels expected to be residual in sugars from pretreated biomass, the engineered cydC-D86G strains produce over 200 mg/L D-limonene and 350 mg/L isopentenol, which are among the highest reported titers in the presence of [EMIM]OAc. CONCLUSIONS: The optimized strains in this study produce high titers of two candidate biofuels and bioproducts under IL stress. Both sets of production strains surpass production titers from other IL tolerant mutants in the literature. Our application of laboratory evolution identified a gain of function mutation in an essential gene, which is unusual in comparison to other published IL tolerant mutants.