Experimental investigations were conducted on fermentative production of acetic acid from waste cheese-whey in a multistage membrane-integrated hybrid process. Traditional fermentation allowed cheese-whey, a cheap and waste material, to be used as carbon source where judicious combinations of cross-flow membrane filtration at the micro, ultra, and nano regimes permitted efficient downstream separation and purification of the product. The provision of separation and recycling of microbial cells and unconverted carbon source allowed fermentation under high cell density with effective use of a carbon source. Continuous separation and removal of the acid product helped to remove product inhibition to a large extent. All these provisions in this novel design resulted in high productivity (4.06 g L −1 h −1 ), substrate to product yield (0.96 g g −1 ), purity (94.6%), and final acetic acid concentration of 96.9 g L −1 at 303 K temperature, 150 rpm of agitator speed under non-neutralizing conditions, and at a dilution rate of 0.102 h −1 . Feed dilution was found to have significant impact on product yield and productivity. Productivity could be enhanced to 4.82 g L −1 h −1 at increased dilution of 0.141 h −1 at the cost of a small reduction in product yield. The process involves no phase change and no harsh chemicals and opens up a novel and green route of continuous production of a value-added product (acetic acid) from a low cost by-product of the dairy industry.