White rot fungi degrade lignin and have biotechnological applications in conversion of lignocellulose to valuable products. Pretreatment is an important processing step to increase the accessibility of cellulosic material in plant biomass, impacting efficiency of subsequent hydrolysis and fermentation. This study investigated microbial pretreatment of cotton stalks by solid state cultivation (SSC) using Phanerochaete chrysosporium to facilitate the conversion into ethanol. The effects of substrate moisture content (M.C.; 65%, 75% and 80% wet-basis), inorganic salt concentration (no salts, modified salts without Mn(2+), modified salts with Mn(2+)) and culture time (0-14 days) on lignin degradation (LD), solids recovery (SR) and availability of carbohydrates (AOC) were examined. Moisture content significantly affected lignin degradation, with 75% and 80% M.C. degrading approximately 6% more lignin than 65% M.C. after 14 days. Within the same moisture content, treatments supplemented with salts were not statistically different than those without salts for LD and AOC. Within the 14day pretreatment, additional time resulted in greater lignin degradation, but indicated a decrease in SR and AOC. Considering cost, solid state cultivation at 75% M.C. without salts was the most preferable pretreatment resulting in 27.6% lignin degradation, 71.1% solids recovery and 41.6% availability of carbohydrates over a period of 14 days. Microbial pretreatment by solid state cultivation has the potential to be a low cost, environmentally friendly alternative to chemical approaches. Moisture relationships will be significant to the design of an effective microbial pretreatment process using SSC technology.