The use of ethanol as a fuel for motor engines has attracted significant attention because of its possible environmental and economic advantages over fossil fuel. However, the energy demand for the ethanol dehydration process significantly impacts its production cost. A new and energy efficient process is developed on the basis of salt extractive distillation, which uses recycled MgCl2 granules as a separating agent. Vapor-liquor-equilibria (VLE) data for the ternary MgCl2 + ethanol + water system, and the three constituent binary systems were measured at 30, 60, 90, and 101.3 kPa. A large enhancement of relative volatility of the ethanol + water system in the presence of MgCl2 is observed throughout the entire ethanol concentration range, which completely broke the azeotrope. The salt effect of MgCl2 is thought to be the result of energetic interactions and the hydration equilibrium reaction of the Mg2+ ion with water molecules. The calculation results by the mixed-solvent electrolyte model embedded in the OLI platform equipped with new model interaction parameters and equilibrium constant (obtained via the regression of experimental VLE data), provided for a satisfactory means of simulating the MgCl2 salt extractive distillation process. Finally, the process was proven feasible at the laboratory-scale resulting in large granules of recovered MgCl2 and a product of 99.5 wt % ethanol. © 2014 American Institute of Chemical Engineers AIChE J, 61: 664-676, 2015 [ABSTRACT FROM AUTHOR]