Abstract: Derivatives of the newly discovered microorganism Thermoanaerobacter ethanolicus which under anaerobic and thermophilic conditions continuously ferment substrates such as starch, cellobiose, glucose, xylose and other sugars to produce recoverable amounts of ethanol solving the problem of fermentations yielding low concentrations of ethanol using the parent strain of the microorganism Thermoanaerobacter ethanolicus are disclosed. These new derivatives are ethanol tolerant up to 10% (v/v) ethanol during fermentation. The process includes the use of an aqueous fermentation medium, containing the substrate at a substrate concentration greater than 1% (w/v).