A two-step fermentation system combining a repeated batch process using a flocculating yeast with a charcoal pellet bioreactor was developed for onion vinegar production. Juice from the red onion R-3, which contained 67.3 g/l total sugar, was smoothly converted to onion alcohol containing 30.6 g/l ethanol by repeated batch operation using the flocculating yeast Saccharomyces cerevisiae strain IR-2. Stable operation was possible and the maximum productivity was about 8.0 g/l/h. A packed bed bioreactor containing charcoal pellets produced from waste mushroom medium was then applied to continuous onion vinegar production from the onion alcohol. Onion vinegar was successfully produced, with a maximum productivity and acetic acid concentration of about 3.3 g/l/h and 37.9 g/l, respectively. The total acetic acid yield calculated from the amount of sugar consumed was 0.86. The two-step system was operated for 50 d and proved to be competitive with other systems in terms of its high productivity, high acetic acid yield, operational stability and low production costs.