The effects of ethanol on reactor performance were studied in a small, 5-cm packed height, "differential" type immobilized cell reactor. Lactose utilizing yeast cells, Kluyveromyces fragilis, were absorbed to a porous adsorbant sponge matrix in a gas continuous reactor. Step changes in the feed ethanol concentration to the column (10-130 g/L) were used to test the reactor response over extended periods of time (about 30-50 h per dosage level) followed by a return to basal zero inlet ethanol feed. Effluent cell density and effluent cell viability were measured at intervals. An inhibitory response in ethanol productivity to feed dosage ethanol levels above 20 g/L was detected almost immediately, with a near steady state response noted within 2.5 h of initiating the dosage. Feed ethanol levels above 50 g/L resulted in a subsequent gradual decrease in reactor productivity over time, which was associated with a decrease in the fraction of viable shed cells in the reactor effluent. The reactor response to a step removal of the ethanol inhibition was also monitored. Quick and complete rebounding of the fermentation rate to the original basal rate was noted following dosage concentrations of under 50 g/L ethanol. Recovery rates slowed following ethanol dosage levels above 50 g/L. Viable shed cell density improved overtime during the slow recovery periods. Growth rates (as determined by shed cell density) were more strongly inhibited than productivity. Growth responded more slowly to changes in ethanol environment as growth rates at 30 h fell to about 40% of the rates measured 7.5 h after initiation of a dosage level. It is concluded that ethanol contributions to cell injury and death (and consequent ICR performance degradation) may be more important than ethanol inhibition of productivity rates in the long-term operation of immobilized cell reactors at ethanol concentrations over 50 g/L.