The purpose of this study was optimization of medium components and culture conditions in order to increase ethanol production by Zymomonas mobilis PTCC 1718. At first, the effects of carbon, nitrogen and culture conditions were optimized by one-factor-at-a-time method. Then nutritional improvement was performed using Taguchi method as a fractional factorial design. The selected carbon sources were xylose, fructose, rafinose, lactose, manitol, maltose, sucrose and glucose. Also, the complex, inorganic and low cost substrate were whey, yeast extract, peptone, ammonium nitrate, potassium nitrate, wheat bran, rice bran and potato extract, respectively. The results showed that among different carbon sources sucrose had significant effect on ethanol production. Due to use of low cost substrates sugar was used as carbon source instead of sucrose. Amongst, variety nitrogen sources whey, yeast extract, peptone and wheat bran were the most suitable sources, respectively. Wheat bran was amongst the low cost substrates. The optimum temperature, inoculums size and pH were 50oC, 12% (V/V) and 5/5, respectively. The results showed that omitting peptone and yeast extract form medium components decreased ethanol production by Zymomonas mobilis PTCC 1718. So, peptone and yeast extract are necessary in medium formulation. Optimization by Taguchi method was studied in two stages. Ethanol production was 2/67% (V/V) in the basal medium. After optimization with one-factor-at-a-time and Taguchi method the ethanol production was increased to 38/63% (V/V) and 86/07% (V/V), respectively.