Tandem production of levan and ethanol by microbial fermentation using sucrose substrate was investigated. The tandem process involves fermentation of Bacillus subtilis (natto) Takahashi in a sucrose medium to produce levan, separation of the levan product from glucose by-product by ultrafiltration and fermentation of the glucose remnant from levan production by Zymomonas mobilis to produce ethanol. After cultivation of B. subtilis (natto) Takahashi for 48 h, 56.0 ± 0.6 g l⁻¹ of levan was produced in a medium containing 250 g l⁻¹ sucrose, which was 45 ± 0.5% yield on available fructose. After removing the cells, the fermentation broth was concentrated by ultrafiltration through a membrane of 5 kDa cutoff. The filtrate which contained 179 ± 3 g l⁻¹ of hexose was diluted, supplemented with yeast extract (5 g l⁻¹), (NH₄)₂SO₄ (1 g l⁻¹), MgSO₄·7H₂O (0.5 g l⁻¹), KH₂PO₄ (1 g l⁻¹) and used for alcohol fermentation by Z. mobilis. Incubation of Z. mobilis in the medium containing glucose remnant at 30 °C, pH 5.5, 175 rpm for 120 h gave from 21.1 ± 0.3 to 26.5 ± 0.2 g l⁻¹ of bio-ethanol depending on the dilution. The tandem process developed in this study is an eco-friendly process in that the sucrose substrate was fully utilized without wasting any by-products in the process; in addition, two invaluable environmentally-friendly biomaterials (levan and ethanol) were produced. Furthermore, the amount of alcohol required for levan recovery could be reduced to a quarter of that generally used in the conventional precipitation.