Dwindling supplies of fossil fuel along with detrimental release of greenhouse gases have led to the quest for renewable sources of fuel such as bioethanol from cellulosic materials. Conversion of biomass to bioethanol involves a set of "biotransformation" and "recovery/concentration" processes. With the help of membrane technology, several process steps that were conventionally separate can be integrated and the production of bioethanol simplified. In addition to efficient recovery of bioethanol, this can facilitate removal of inhibitory side products from the fermentation broth and recovery of the inhibitory but valuable side products. This chapter provides a critical review of the application of membrane technology in various steps of bioethanol production. The challenges to widespread deployment of full-scale bioethanol facilities equipped with membranes have also been outlined.