Cellulases are an ensemble of enzymes that hydrolyze cellulose chains into fermentable glucose and hence are widely used in bioethanol production. The last enzyme of the cellulose degradation pathway, β‐glucosidase, is inhibited by its product, glucose. The product inhibition by glucose hinders cellulose hydrolysis limiting the saccharification during bioethanol production. Thus, engineered β‐glucosidases with enhanced glucose tolerance and catalytic efficiency are essential. This study focuses on the rational engineering of β‐glucosidase from Acetivibrio thermocellus (WT‐AtGH1). Recombinant WT‐AtGH1 exhibited activity on cellobiose and p ‐nitrophenyl‐β‐ d ‐glucoside as substrates and retained around 80% of its activity over 48 h at 55 °C, pH 5.5. However, WT‐AtGH1 showed low glucose tolerance of 380 m m as compared to the required IC 50 value of > 800 m m for industrial use. Thus, a rational design approach was utilized to enhance the glucose tolerance of this enzyme. We determined the 3 Å resolution crystal structure of WT‐AtGH1. The structure‐based engineered G168W‐AtGH1 and S242W‐AtGH1 mutants exhibited improved glucose tolerance of 840 and 612 m m , respectively. Surprisingly, S242L‐AtGH1 mutant showed ~ 2.5‐fold increase in the catalytic efficiency as compared to WT‐AtGH1. A combinatorial effect of improved glucose tolerance, as well as enhanced catalytic efficiency, was observed for the G168W‐S242L‐AtGH1 mutant. All the mutants with enhanced properties showed considerable stability at industrial operating conditions of 55 °C and pH 5.5. Thus, we present mutants of WT‐AtGH1 with improved glucose tolerance and kinetic properties that have the potential to increase the efficiency of saccharification during biofuel production.