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The objective of this study was to optimize continuous acetone-butanol-ethanol (ABE) fermentation using two stage chemostat system integrated with liquid-liquid extraction of solvents produced in first stage. This minimized end product inhibition by butanol and subsequently enhanced glucose utilization and solvent production in continuous culture of Clostridium acetobutylicum B 5313. During continuous two-stage ABE fermentation, sugarcane baggase was used as cell holding material for the both stages and liquid-liquid extraction was performed using oleyl alcohol and decanol mixture. An overall solvent production of 25.32 g/L (acetone 5.93 g/L, butanol 16.90 g/L and ethanol 2.48 g/L) was observed as compared to 15.98 g/L in single stage chemostat with highest solvent productivity and solvent yield of 2.5 g/L.h and of 0.35 g/g, respectively. Maximum glucose utilization (83.21 %) at dilution rate of 0.05 1/h was observed as compared to 54.38 % in single stage chemostat.