A new approach for the utilization of hemicellulosic hydrolysate from sugarcane bagasse is described. This approach consists of using the hydrolysate to dilute the conventional feedstock (sugarcane juice) to the usual sugar concentration (150 g/L) employed for the industrial production of ethanol. The resulting sugar mixture was used as the substrate to evaluate the performance of a continuous reactor incorporating a cell recycle module, operated at several dilution rates. An induced flocculent pentose-fermenting yeast strain was used for this bioconversion. Under the conditions used, the reactor performance was satisfactory at substrate feed rates of 30 g/(L.h) or less, corresponding to an ethanol productivity of about 11.0 g/(L.h) and an overall sugar conversion >95%. These results show real advantages over the existing alternatives for a better exploitation of surplus bagasse to increase industrial alcohol production.