The continuous ethanol production in tubular bioreactor integrated with the membrane distillation system (MD) has been investigated. By-products formed during the ethanolic fermentation of sugar with Saccharomyces cerevisiae inhibited the process. These products were selectively removed from the fermenting broth by MD process. This allows to increase the efficiency and the rate of sugar conversion to ethanol. The fermentation process carried out continuously in the membrane bioreactor with the yeast concentration of 20 g/dm3 results in the productivity of 6 g EtOH/dm3h and the efficiency closed to 96 %, after 20 h. The productivity decreased to 1.1 g EtOH/dm3h with the efficiency below 30 % for the fermentation under similar conditions, but without MD. The separation of alcohol by MD enables to achieve a higher content of ethanol in the permeate than in the broth. The enrichment coefficient amounted to 2-4 was depended on the ethanol concentration in the feed. The positive influence of CO2 on the ethanol transport through the membranes was found.