A multistage process for producing isoalkyl ethers from lower aliphatic oxygenate feedstock, such as methanol. Feedstock is catalytically converted in a primary catalyst stage at elevated temperature in contact with zeolite catalyst to predominantly C.sub.2 -C.sub.7 lower olefins comprising isobutylene and isoamylene, by-product water and a minor amount of C.sub.8.sup.+ hydrocarbons, followed by fractionation of the C.sub.2 -C.sub.7 olefins to recover a C.sub.2 -C.sub.3 -rich recycle stream for further catalytic conversion in the primary stage. C.sub.4 -C.sub.7 olefins are passed to a second catalytic etherification stage for reaction of isoalkenes with methanol to produce methyl tertiary-butyl ether, methyl isoamylether and higher isoalkyl ethers. The second stage effluent may be fractionated to recover an ether product, C.sub.5.sup.+ hydrocarbon liquid product, and unreacted butenes. Advantageously, the unreacted butenes are further reacted with isoparaffin in a third catalytic stage under acid catalysis alkylation conditions, and fractionated to recover C.sub.6.sup.+ alkylate liquid, liquid hydrocarbon product. The ethers may be blended with at least one C.sub.6.sup.+ hydrocarbon to produce high octane gasoline.