An ultrafiltration membrane reactor was used to investigate the recovery of biocatalysts during enzymatic hydrolysis of pretreated sallow. Product inhibition could be eliminated by continuous removal of products through the ultrafiltration membrane, thus retaining the macromolecular substrate and enzymes. In this way, the degree of conversion was improved from 40% in a batch hydrolysis to 95% (within 20 h), and the initial hydrolysis rate was increased up to seven times. The recovery studies were focused on mechanical deactivation and irreversible adsorption on to the nonconvertible fraction of the substrate. Cellulase deactivation during mechanical agitation was not significant, and the loss of activity was attributed mainly to strong adsorption of the enzymes onto undigested material. This process was studied in semicontinuous hydrolyses, where fresh substrate was added intermittently. The amount of reducing sugars produced in this experiment was 25.7 g/g enzyme, compared to 4.7 g/g enzyme in a batch hydrolysis.