Low-cost nitrogen sources, i.e., dried spent yeast (DSY), rice bran (RB), soybean meal (SM), urea and ammonium sulfate were used for batch butanol fermentation from sugarcane molasses by Clostridium beijerinckii TISTR 1461 under anaerobic conditions. Among these five low-cost nitrogen sources, DSY at 1.53 g/L (nitrogen content equal to that of 1 g/L of yeast extract) was found to be the most suitable. At an initial sugar level of 60 g/L, the maximum butanol concentration (PB), productivity (QB) and yield (YB/S) were 11.19 g/L, 0.23 g/L·h and 0.31 g/g, respectively. To improve the butanol production, the concentrations of initial sugar, DSY and calcium carbonate were varied using response surface methodology (RSM) based on Box–Behnken design. It was found that the optimal conditions for high butanol production were initial sugar, 50 g/L; DSY, 6 g/L and calcium carbonate, 6.6 g/L. Under these conditions, the highest experimental PB, QB and YB/S values were 11.38 g/L, 0.32 g/L·h and 0.40 g/g, respectively with 50% sugar consumption (SC). The PB with neither DSY nor CaCO3 was only 8.53 g/L. When an in situ gas stripping system was connected to the fermenter to remove butanol produced during the fermentation, the PB was increased to 15.33 g/L, whereas the YB/S (0.39 g/g) was not changed. However, the QB was decreased to 0.21 g/L·h with 75% SC.