Fermentation of glucose-xylose mixtures to ethanol was investigated in batch and continuous experiments using immobilized recombinant Zymomonas mobilis CP4(pZB5). This microorganism was immobilized by entrapment in κ-carrageenan beads having a diameter of 1.5–2.5 mm. Batch experiments showed that the immobilized cells cofermented glucose and xylose to ethanol and that the presence of glucose improved the xylose utilization rate. Batch fermentation of rice straw hydrolysate containing 76 g/L of glucose and 33.8 g/L of xylose gave an ethanol concentration of 44.3 g/L after 24 h, corresponding to a yield of 0.46 g of ethanol/g of sugars. Comparable results were achieved with a synthetic sugar control. Continuous fermentation experiments were performed in a laboratory-scale fluidized-bed bioreactor (FBR). Glucose-xylose feed mixtures were pumped through the FBR at residence times of 2–4 h. Glucose conversion to ethanol was maintained above 98% in all experiments. Xylose conversion to ethanol was highest at 91.5% for a feed containing 50 g/L of glucose and 13 g/L of xylose at a dilution rate of 0.24/h. The xylose conversion to ethanol decreased with increasing feed xylose concentration, dilution rate, and age of the immobilized cells. Volumetric ethanol productivities in the range of 6.5–15.3 g/L·h were obtained. The improved productivities achieved in the FBR compared to other bioreactor systems can help in reducing the production costs of fuel ethanol from lignocellulosic sugars.