Cyclodextrin glycosyltransferase (CGTase) was found to be severely inhibited by cyclodextrins. In order to increase the conversion yield by reducing product inhibition and reuse the CGTase in the production of cyclodextrins from milled corn starch, an ultrafiltration membrane bioreactor system was employed. In a batch operation with ultrafiltration, the conversion yield was increased 57% compared with that without ultrafiltration. Operating conditions for the continuous production of cyclodextrins in the membrane bioreactor were optimized by taking into consideration the filtration rate and the conversion yield as follows: initial starch concentration, 7% (w/v); starch feeding rate, 240 mg/h; CGTase loading, 350 units/initial gram starch. When cyclodextrins were continuously produced in the membrane bioreactor under optimized conditions, 340 units of CGTase was require to produce 1 g of cyclodextrins for 48 h, while in the case of conventional batch operation, 1 g of cyclodextrins was produced for 24 h by 1410 units of CGTase.