Alcohol fermentation has traditionally been carried out in aqueous environments because of the ready solubility of reactant (sugar) and product (ethanol). However, extraction of the product ethanol into a nonmiscible phase can result in kinetic benefits due to reduced inhibition of the fermentation reactions. In this study, we report the development of a novel simultaneous saccharification and extractive fermentation (SSEF) process. Ethanol productivity was increased by up to 65% over conventional (nonextractive) fed-batch simultaneous saccharification systems when calculated on the basis of aqueous phase volume. The amount of water required for SSEF reactions was dramatically reduced from that required for conventional SSF. In batch SSEF reactors with 2.5% aqueous phase, 50% conversion of 25% (aqueous phase concentration) Solka Flee could be achieved in 48 h using 2 FPU/g cellulase.