The design of separation systems for the purification of azeotropic mixtures is of great importance in the chemical industries from economic and environmental points of view. Two novel reactive-extractive distillation (RED) processes, new design (I) and new design (II), were proposed for separating the azeotropic mixture of water/methanol/tetrahydrofuran (THF). These processes were compared to a conventional extractive distillation (ED) process. New design (I) employs dimethyl sulfoxide as a solvent, while new design (II) utilizes ethylene glycol. Ethylene oxide was introduced to the first column in both designs, enabling the in-situ production of ethylene glycol, a valuable byproduct. This is a novel solution to separate water from the azeotropic mixture by reaction between ethylene oxide and water. Aspen Plus software was used to simulate and design the processes. Both suggested designs were compared economically with the base design which is an ED process. According to the results, the new design (I) is more cost-effective and environmentally friendly alternative to the base design and the new design (II). It has a lower total capital cost and produces less carbon dioxide. Additionally, it generates a valuable by-product, ethylene glycol, which can be sold for substantial revenue. As a result, the new design (I) is the preferred choice for replacing the conventional extractive distillation method.