Yeast, immobilised in alginate beads of known standard size and mechanical strength, has been utilised in a novel design of fluidised bed bioreactor which avoids problems of particle flotation and gas logging. Circulating substrate simultaneously entered the top and bottom of the bed. The bioreactor operated reliably for periods of up to 20 days. Increasing alginate concentration in the range 1-5% (w/w) had little effect on the performance of the immobilised yeast in converting ethanol to glucose but reduced the tendency of beads to split. Increasing bead diameter in the range 1-5 mm increased the tendency to split and reduced overall conversion of glucose. A model was developed to describe the consumption of glucose within beads based on Michaelis-Menten kinetics and the diffusion of glucose into beads. Application of the model to experimental results showed maximum reaction velocity to be independent of bead diameter and alginate concentration. The model confirmed that the observed reduction in ethanol yield compared with free yeast cells was caused by the lower substrate concentration towards the centre of the bead as opposed to any change in the metabolic rate of the immobilised cells.