A fundamental challenge in basic and applied biology is to reprogram cells with improved or novel traits on a genomic scale. However, the current ability to reprogram a cell on the genome scale is limited to bacterial cells. Here, we report RNA interference (RNAi)-assisted genome evolution (RAGE) as a generally applicable method for genome-scale engineering in the yeast Saccharomyces cerevisiae. Through iterative cycles of creating a library of RNAi induced reduction-of-function mutants coupled with high throughput screening or selection, RAGE can continuously improve target trait(s) by accumulating multiplex beneficial genetic modifications in an evolving yeast genome. To validate the RNAi library constructed with yeast genomic DNA and convergent-promoter expression cassette, we demonstrated RNAi screening in Saccharomyces cerevisiae for the first time by identifying two known and three novel suppressors of a telomerase-deficient mutation yku70Δ. We then showed the application of RAGE for improved acetic acid tolerance, a key trait for microbial production of chemicals and fuels. Three rounds of iterative RNAi screening led to the identification of three gene knockdown targets that acted synergistically to confer an engineered yeast strain with substantially improved acetic acid tolerance. RAGE should greatly accelerate the design and evolution of organisms with desired traits and provide new insights on genome structure, function, and evolution.