Ethanol from renewable resources has been of interest in recent decades as an alternative fuel or oxygenate additive to the current fossil fuels. Lignocellulosic materials are cheap renewable resources, available in large quantities. The dominant materials in lignocelluloses are cellulose, hemicellulose and lignin. The cellulose and hemicellulose can be hydrolyzed chemically or enzymatically to the corresponding monomeric sugars. Dilute-sulfuric acid hydrolysis is a chemical hydrolysis used either for the pretreatment before enzymatic hydrolysis or for the conversion of lignocellulose to the corresponding sugars. The results of this work show the ability of single-stage hydrolysis to depolymerize hemicellulose of rice straw to a maximum yield of 80.8% xylose at hydrolysis pressure of 15 bar, 10 min retention time and 0.5% acid concentration. The high concentration of xylose in the resulted hydrolyzate demands a xylose fermenting microorganism for ethanol production. We have tested the ability of two fungi, Mucor indicus and Rhizopus oryzae in ethanol production from hexoses and xylose in dilute-acid lignocellulosic hydrolyzate. These fungi have valuable biomass, since it contains significant quantities of chitosan. M. indicus could successfully produce ethanol from xylose-rich hydrolyzate of rice straw, but as not good as Pichia stipitis in ethanol yield. The fungus also show a good resistance to the inhibitors presented in the hydrolyzate. However, the xylose utilization by M. indicus was sensitive to aeration rate. In a part of this work, after initial growth of M. indicus in 500 ml enzymatic wheat hydrolyzate, lignocellulosic hydrolyzate was fermented with feeding rates 0.1 and 0.2 h-1. The fungus consumed more than 46% of the initial xylose, while less than half of this xylose was excreted in form of xylitol. The ethanol yield was 0.43 g/g consumed sugars. In another part of this work, ethanol was produced in continuous cultivation. With addition of enzymatic wheat hydrolyzate, biotin and a nitrogen source to dilute acid hydrolyzate, it is possible to produce ethanol continuously with a yield as high as 0.44 g ethanol per g of consumed sugars. Ethanol production from cellulose fraction of rice straw performed by simultaneous saccharification and fermentation (SSF) with Saccharomyces cerevisiae, M. indicus, and R. oryzae, where the latter had the best ethanol yield as 74% from rice straw followed by M. indicus with an overall yield of 68% with 15 FPU/g DM of cellulase.