With the aim of determining the possibilities of directly upgrading the liquid obtained from carbohydrate fermentation, the effect of operating conditions (temperature, space time, water content in the feed) has been studied in the catalytic transformation of aqueous ethanol into hydrocarbons on an HZSM-5 zeolite in an isothermal fixed bed reactor. Special attention has been paid to the effect of water content on the yield, product distribution and catalyst deactivation. Although deactivation by coke decreases as the water content is increased, this content must be limited at 450degreesC and higher temperatures in order to avoid irreversible deactivation of the catalyst by dealumination.