The reaction of toluene with ethanol was studied over various cation-exchanged pentasil zeolite catalysts. The toluene disproportionation reaction to produce xylenes increased with increasing reaction temperature and the activity of alkylation of toluene with ethanol showed maximum at around $400^{circ}C$. Only Cs-ZSM-5 catalyst showed pronounced p-ethyltoluene selectivity increasing to 96% with increasing degree of Cs-exchange. The sorption rate of m-xylene was lower for Cs-exchanged ZSM-5 than H-ZSM-5 catalyst. These phenomena were interpreted in terms of shape selectivity arising from the partial blocking of channel intersections by large cesium ions.