An anaerobic thermophilic coculture consisting of a heterofermentative bacterium (Clostridium thermolacticum) and a homoacetogen (Moorella thermoautotrophica) was developed for acetic acid production from lactose and milk permeate. The fermentation kinetics with free cells in conventional fermentors and immobilized cells in a recycle batch fibrous‐bed bioreactor were studied. The optimal conditions for the cocultured fermentation were found to be 58 °C and pH 6.4. In the free‐cell fermentation, C.thermolacticum converted lactose to acetate, ethanol, lactate, H2 and CO2, and the homoacetogen then converted lactate, H2, and CO2 to acetate. The overall acetate yield from lactose ranged from 0.46 to 0.65 g/g lactose fermented, depending on the fermentation conditions. In contrast, no ethanol was produced in the immobilized‐cell fermentation, and the overall acetate yield from lactose increased to 0.8−0.96 g/g lactose fermented. The fibrous‐bed bioreactor also gave a higher final acetate concentration (up to 25.5 g/L) and reactor productivity (0.18−0.54 g/L/h) as compared to those from the free‐cell fermentation (final acetate concentration, 15 g/L; productivity, 0.06−0.08 g/L/h). The superior performance of the fibrous‐bed bioreactor was attributed to the high cell density (20 g/L) immobilized in the fibrous‐bed and adaptation of C. thermolacticumcells to tolerate a higher acetate concentration. The effects of yeast extract and trypticase as nutrient supplements on the fermentation were also studied. For the free‐cell fermentation, nutrient supplementation was necessary for the bacteria to grow in milk permeate. For the immobilized‐cell fermentation, plain milk permeate gave a high acetate yield (0.96 g/g), although the reactor productivity was lower than those with nutrient supplementation. Balanced growth and fermentation activities between the two bacteria in the coculture are important to the quantitative conversion of lactose to acetic acid. Lactate and hydrogen produced by C. thermolacticum must be timely converted to acetic acid by the homoacetogen to avoid inhibition by these metabolites.