The present study describes production of bio-ethanol from fresh red alga, Kappaphycus alvarezii. It was crushed to expel sap - a biofertilizer - while residual biomass was saccharified at 100 degrees C in 0.9 N H2SO4. The hydrolysate was repeatedly treated with additional granules to achieve desired reducing sugar concentration. The best yields for saccharification, inclusive of sugar loss in residue, were 26.2% and 30.6% (w/w) at laboratory (250 g) and bench (16 kg) scales, respectively. The hydrolysate was neutralized with lime and the filtrate was desalted by electrodialysis. Saccharomyces cerevisiae (NCIM 3523) was used for ethanol production from this non-traditional bio-resource. Fermentation at laboratory and bench scales converted ca. 80% of reducing sugar into ethanol in near quantitative selectivity. A petrol vehicle was successfully run with E10 gasoline made from the seaweed-based ethanol. Co-production of ethanol and bio-fertilizer from this seaweed may emerge as a promising alternative to land-based bio-ethanol. (C) 2011 Elsevier Ltd. All rights reserved.