In the fermentation process, the separation of product and its purification is the most difficult and exigent task in the ground of biochemical engineering. Another major problem that is encountered in the fermentation is product inhibition, which leads to low conversion and low productivities. Extractive fermentation is a technique that helps in the in situ removal of product and better performance of the fermentation. An aqueous two-phase system was employed for in situ ethanol separation since the technique was biofriendly to the Saccharomyces cerevisiae and the ethanol produced. The two-phase system was obtained with polyethylene glycol 4000 (PEG 4000) and ammonium sulfate in water above critical concentrations, with the desire that the ethanol moves to the top phase while cells rest at the bottom. The overall mass transfer coefficient (KLa) was also estimated for the yeast growth at different rpm. The concentration and yield of ethanol were determined for conventional fermentation to be around 81.3% and for extractive fermentation around 87.5% at the end of the fermentation. Based on observation of both processes, extractive fermentation was found to be the best.