Isopropanol, also known as isopropyl alcohol (IPA) is an important solvent used in many industries. It is mostly produced by direct hydration of propylene involving reversible reaction and azeotropic distillation in separate equipment. There have been many studies on separation of IPA and water azeotropic mixture but very few studies on the use of reactive distillation (RD), for improving overall efficiency of the entire process. RD can be used for IPA production in two different ways: with excess propylene to avoid azeotropic separation, and with excess water to achieve near complete conversion of propylene. The present work investigates both these options by design and optimization of complete IPA process for minimizing capital and operating costs. The results show that the RD process with excess water has lower costs compared to the RD process with excess propylene; but the former incurs small loss of propylene.