The effects of high concentrations of whey permeate on a lactose fermenting yeast, K. marxianus, were studied using both free and immobilized cell reactors. Examination of substrate and product inhibition data from the literature suggests that a simple linear osmolality model may account for both the substrate and product inhibition of anaerobic yeast growth and ethanol productivity for this yeast and others. The osmolality of sweet whey permeate concentrate (SWPC) and acid whey permeate concentrate (AWPC) solutions were determined and fitted to a simple empirical model. The batch free cell growth rates and immobilized cell growth and productivity in these solutions was then determined. Batch cell growth was found to be 85% inhibited at osmolalities of 2.2 os/kg in both AWPC and SWPC, although the maximal specific growth rate for SWPC was 2.6 times higher than for AWPC. Immobilized cell growth inhibition patterns were different between AWPC and SWPC. An 80% inhibition in effluent cell density was noted at an osmolality of 1.3 os/kg with AWPC, while with SWPC, this level of inhibition was not reached until 1.9 os/kg. The cell growth of the immobilized cells was more strongly inhibited than the free cells at higher solution osmolalities. The effect of osmolality on immobilized cell productivity as measured by gas evolution rates was also examined. A 66-85% inhibition of productivity was noted at 2.4 os/kg (31% solids) with AWPC, while SWPC was only 30-60% inhibited at 2.2 os/kg (40% solids). The immobilized cells were more tolerant to high osmolalities if the osmolality was increased slowly over time, indicating adaptation by the, immobilized cells. The productivity of immobilized cells was less inhibited by high osmolality than free cell productivity as reported by other researchers.