Ethanol production in tubular bioreactor integrated with the membrane distillation (MD) system has been investigated. The fermentation of sugar with Saccharomyces cerevisiae proceeds with the formation of by-products, which tends to inhibit the yeast productivity. The removal of by-products front the fermenting broth by MD process increased the efficiency and the rate of sugar conversion to ethanol. The fermentation process carried out in the membrane bioreactor with the yeast concentration of 20 g dm(-3) resulted in the productivity of 5.5 g EtOH dm(-3) h and the efficiency closed to 95% after 20 h. The productivity decreased to 2.6 g EtOH dm(-3) h with the efficiency below 50%, for the fermentation under similar conditions, but without MD. The separation of alcohol by MD enabled to achieve a higher content of ethanol in the permeate than that in the broth. The enrichment coefficient amounted to 2-6 were depended on the ethanol concentration in the feed. The presence of yeast cells in the feed increased the concentration and the temperature polarization, consequently the ethanol flux through the membrane was reduced by ca. 50%. A beneficial effect of carbon dioxide presence in the feed on the ethanol flux was found. The evolution of CO2 bubbles from the fermenting broth enhanced the turbulence in the boundary layer, hence the ethanol transport through the membrane increased.