A novel design of a wheat-based biorefinery for bioethanol production, including wheat milling, gluten extraction as byproduct, fungal submerged fermentation for enzyme production, starch hydrolysis, fungal biomass autolysis for nutrient regeneration, yeast fermentation with recycling integrated with a pervaporation membrane for ethanol concentration, and fuel-grade ethanol purification by pressure swing distillation (PSD), was optimized in continuous mode using the equation-based software General Algebraic Modelling System (GAMS). The novel wheat biorefining strategy could result in a production cost within the range of dollars 0.96-0.50 gal(-1) ethanol (dollars 0.25-0.13 L(-1) ethanol) when the production capacity of the plant is within the range of 10-33.5 million gal y(-1) (37.85-126.8 million L y(-1)). The production of value-added byproducts (e.g., bran-rich pearlings, gluten, pure yeast cells) was identified as a crucial factor for improving the economics of fuel ethanol production from wheat. Integration of yeast fermentation with pervaporation membrane could result in the concentration of ethanol in the fermentation outlet stream (up to 40 mol %). The application of a PSD system that consisted of a low-pressure and a high-pressure column and employing heat integration between the high- and low-pressure columns resulted in reduced operating cost (up to 44%) for fuel-grade ethanol production.