Lignocellulosic biomass can be utilized to produce ethanol, a promising alternative energy source for the limited crude oil. There are mainly two processes involved in the conversion: hydrolysis of cellulose in the lignocellulosic biomass to produce reducing sugars, and fermentation of the sugars to ethanol. The cost of ethanol production from lignocellulosic materials is relatively high based on current technologies, and the main challenges are the low yield and high cost of the hydrolysis process. Considerable research efforts have been made to improve the hydrolysis of lignocellulosic materials. Pretreatment of lignocellulosic materials to remove lignin and hemicellulose can significantly enhance the hydrolysis of cellulose. Optimization of the cellulase enzymes and the enzyme loading can also improve the hydrolysis. Simultaneous saccharification and fermentation effectively removes glucose, which is an inhibitor to cellulase activity, thus increasing the yield and rate of cellulose hydrolysis.