An ethanol-fed sulphate reducing in situ bioreactor for the treatment of acidic mining impacted lakes is currently under development. The reactor comprises a straw filled fixed bed reactor which is installed vertically in an enclosure in the lake. In a laboratory study it was tested which microbial processes take place in these reactors and whether elevated concentrations of acetate had an inhibitory effect on sulphate reduction. In batch assays ethanol was exclusively oxidised to acetate via sulphate reduction. Complete oxidation of acetate as well as methanogenesis were not observed. Acetate inhibited sulphate reduction at concentrations above 15 mmol L-1. The process performance, however, is unlikely to be inhib- ited by acetate since the highest concentration ever measured in the in situ reactors was below 10 mmol L-1. High acetate concentrations in the effluent, however, are not acceptable both from an economically and environmental point of view.