Abstract Six strains of a trained lactose fermenting Kluyveromyces yeast were examined for their ability to utilise lactose in sweet-whey permeate. All strains of K. fragilis tested reduced the concentration of the 5·1% lactose, initially present in whey permeate, to 0·1 – 0·2% within 48 h. Periodic adjustment to maintain the pH during fermentation did not alter the lactose utilisation. The fermentation efficiency of K. fragilis was then compared with that of a mixture of K. fragilis and the classical alcohol fermenter Saccharomyces cerevisiae to verify that no unfavourable interactions occurred in the mixed culture. There were no differences in lactose utilisation or ethanol production between the two groups; both produced approximately 2% ethanol within 24 h. This represented approximately 80% of the alcohol which theoretically could be produced from the 5·1% lactose present in the permeate. Whey permeate was also incorporated into the classical grain fermentation by substitution for one-half the water normally added to produce the mash. Fermentation was nearly complete by 36 h and alcohol levels ranged from 9·7% for the mixed culture to 9·4% for the K. fragilis and 9·3% for the S. cerevisiae. Since the whey provided significant levels of fermentable sugars, studies were also conducted in which undiluted whey permeate was substituted for all of the water in the mash and the amount of grain was reduced by 20%. At the end of 36 h K. fragilis produced 10·9% alcohol and at 60 h of fermentation the level reached 12·2%. When whole sweet-whey or whole acid-whey was used, similar levels of alcohol were produced.