Biofuels are an increasing part of the sustainable energy picture. This makes it a societal and economic imperative to optimize biofuel production. Mitigating the toxic effects of amphiphilic co-solvents is one way to improve the efficiency of biofuel production. Amphiphiles partition into cellular membranes, leading to membrane thinning, destabilization, loss of membrane potential, and, ultimately, cell death. However, this picture of solvent toxicity misses the disruptive impact of co-solvents on lateral membrane organization, which is increasingly recognized as critical for membrane protein sorting and oligomerization. The alteration or disruption of membrane domains has deleterious effects on cellular processes. In this work, we pursue the hypothesis that membrane lateral organization is disrupted by the presence of co-solvents at concentrations lower than those which lead to full membrane destabilization. The disruption occurs due to an increasing interfacial tension between the co-existing phases, resulting in conformational changes to minimize the interfacial length-to-area ratio. This represents an unrecognized mode of solvent-induced stress and a new target for interventions to improve fermentation yields.