Debaryomyces nepalensis, osmotolerant yeast isolated from rotten apple, is known to utilize both hexoses and pentoses and produce industrially important metabolites like ethanol, xylitol and arabitol. In the present study, the effect of different growth substrates, trace elements, nitrogen concentration and initial pH on growth and formation of ethanol and arabitol were examined. Optimum conditions for maximizing the product yields were established: glucose as carbon source, an initial pH of 6.0, 6 g/L of ammonium sulphate and addition of micronutrients. Under these best suited conditions, a concentration of 11g/L of arabitol and 19 g/L of ethanol was obtained in shake flask fermentations. The fermentation was scaled up to 2.5 L bioreactor and the influence of aeration, agitation and initial substrate concentration was also determined. Under optimal conditions (150 g/L glucose, 400 rpm and 0.5 vvm) ethanol concentration reached 52 g/L, which corresponds to a yield of 0.34 g/g and volumetric productivity of 0.28 g/L/h, whereas arabitol production reached a maximum of 14 g/L with a yield and volumetric productivity of 0.1 g/g and 0.07 g/L/h respectively.