An apparatus and method for drying ethanol includes a first reaction chamber for carrying out the removal of water from wet ethanol, a feed inlet for introducing the wet ethanol into the reaction chamber, a product outlet for removing dry ethanol from the reaction chamber, an optional fuel inlet for introducing a fuel into the reaction chamber, and a particulate bed, including sorbent particles, that is disposed within the reaction chamber. In a preferred embodiment, the bed is divided into first and second zones each provided with different size sorbent particles. In another preferred embodiment, the bed contains a mixture of sorbent particles and catalyst particles. The sorbent particles operate to remove water from the wet ethanol and form hydrated-sorbent particles. The catalyst particles operate to promote chemical reaction of the fuel, generating heat that causes removal of water from the hydrated-sorbent particles and regenerating the sorbent particles.