Saccharomyces cerevisiae is a widely used host organism for the production of heterologous proteins, often cultivated in glucose-based fed-batch processes. This production system however has many factors limiting the productivity, mainly towards the end of the fermentation. For the optimised production of a Camelid antibody fragment this process was evaluated. In shake flask cultivations, it was found that ethanol has a strong effect on productivity increase and therefore glucose and ethanol fed-batch fermentations were compared. It appeared that specific heterologous protein production was up to five times higher in the ethanol cultivation and could be further optimised. Then the key characteristics of ethanol fed-batch fermentations such as growth rate and specific production were determined under ethanol limitation and accumulation and growth limiting conditions in the final phase of the process. It appeared that an optimal production process should have an ethanol accumulation throughout the feed phase of approximately 1% v/v in the broth and that production remains very efficient even in the last phase of the process. This productivity increase on ethanol versus glucose was also proven for several other Camelid antibody fragments some of which were heavily impaired in secretion on glucose, but very well produced on ethanol. This leads to the suggestion that the ethanol effect on improved heterologous protein production is linked to a stress response and folding and secretion efficiency. Biotechnol. Bioeng. 2007;96: 483–494. © 2006 Wiley Periodicals, Inc.