A cellobiose-utilizing recombinant yeast having $eta$-glucosidase activity was developed for ethanol production from a mixture of glucose and cellobiose. Using $delta$-sequences of Tyl transposon of yeast as target sites for homologous recombination, a heterologous gene of $eta$-glucosidase was integrated into the chromosome of Saccharomyces cerevisiae. The $delta$-integrated recombinant yeast, Saccharomyces cerevisiae L2612 (Pb-BGL), showed perfect mitotic stability even in nonselective media and showed ca. 1.5 fold higher $eta$-glucosidase activity than the recombinant yeast harboring the $2mu$-based plasmid vector system. A mathematical model was developed to describe the $eta$-glucosidase formation and ethanol production from the Saccharomyces cerevisiae L2612 ($pdelta-BGL$). The model newly described that the heterologous $eta$-glucosidase production mediated by ADH1 promoter is regulated by glucose and repressed by ethanol.