In this work, the hydrodynamic and mass transfer characteristics were studied in an internal loop airlift-driven bioreactor (ILALB) with and without fibrous-bed packing. Woven cotton and/or polyurethane foam were inserted in the downcomer section of the ILALB to represent the fibrous-bed. Gas holdup and K(L)a values continuously increased with decrease in gap width, but with increases in both packing height and bed's top clearance. This was associated with the increase in the interfacial area due to the shearing action of the fibrous-bed. Increased amounts of packing in the ILALB, whether cotton or polyurethane foam in the form of height with large top clearance and narrow gap width, decreased the liquid circulation velocity in the ILALB because of increased frictional resistance, tortuosity, and baffling action of the bed. Empirical correlations are presented which accurately predict gas holdup, liquid circulation velocities, and volumetric mass transfer coefficient as a function of all five independent variables (packing nature, packing height, bed's top and bottom clearances, gap width, and gas velocity). The optimum hydrodynamic conditions to improve mass transfer were observed at full packing with large bed top clearance and 0.004 m gap width between fiber surfaces. (C) 2009 Elsevier B. V. All rights reserved.