In the production of bio-ethanol, Pressure Swing Adsorption (PSA) process is used to remove water and obtain >99.5 wt% ethanol. The 2-bed 4-step PSA cycle consists of following steps: high pressure feed, counter-current blowdown, vacuum purge and counter-current pressurization with product. Our previously developed PSA simulator for this process assumed that only water is being adsorbed, while ethanol was considered as an inert. However, our recent gravimetric measurements have revealed that ethanol is co-adsorbed as well. Equilibrium data for water-ethanol system were measured and fitted to find reasonable equilibrium model. Adsorption kinetics was approximated by a linear driving force model for both water and ethanol. The effect of ethanol co-adsorption on the separation performance was studied using an updated PSA simulator. Several scenarios were calculated using the binary model and compared to our previous results.