Ethanol production from the dilute feedstock of simulated and actual Sugarcane mill wastewater was investigated by using the anaerobic entrapped yeast cell process. It was found that the ethanol productivity of 0.138x10(-4) g/liter void volume/h per unit volume of carrier could be achieved at the dilution rate of 0.05 h(-1) using actual sugarcane mill wastewater with the feed COD concentrations of 0.9-1.4 g/liter. Ethanol productivities of 0.225x10(-4) g/liter void volume/h per unit volume of carrier and 2.31x10(-4) g/liter volume/h per unit volume of carrier could be achieved at the dilution rates of 0.075 and 0.20 h(-1) with the feed COD concentrations of 2 and 6 g/liter, of simulated dilute feedstock, respectively. Based on the cost analysis of both maximum ethanol and methane productions from the dilute feedstock, the selection of the ethanol production is more beneficial than methane production for a period of longer than 8 years. The system provides an appropriate approach for pollution control, biofuel production, and treated wastewater reuse.