Ethanol for fuel uses is normally produced from sugar‐ and starch‐containing crops, which are expensive raw materials and require the consumption of traditional food sources. Rice hull, an abundant agricultural waste, consists of 32.3 ± 0.5% glucan and 13.0 ± 1.3% xylan (dry weight) and has the potential for use as a low‐cost feedstock in ethanol production. Processing challenges need to be addressed in order to achieve commercial rice hull conversion to fermentable sugars. In the present study, the effect of various acid‐to‐biomass ratios and impregnation and hydrolysis durations was evaluated from glucan and xylan conversion yields of rice hull to monomeric sugars and the production of fermentation inhibitors. Additionally, the effect of the inhibitors, 5‐hydroxymethylfurfural (HMF), furfural, and acetic acid, on fermentability by Saccharomyces cerevisiae was evaluated by the comparison between fermentation parameters of rice‐hull hydrolysate and a reference medium. Under optimal conditions of acid pretreatment (2:1 of acid‐to‐biomass ratio, 5‐h impregnation, and 2‐h hydrolysis), high glucan and xylan conversion yields of 92 and 95% were achieved, respectively. Extreme acidity and increased retention time under high temperature were the most important factors influencing the degradation of glucose and xylose, increasing HMF and furfural concentrations, respectively. Although rice‐hull hydrolysate was sufficient for ethanol production, the presence of inhibitors in rice‐hull hydrolysate decreased the specific growth rate and cell growth of S. cerevisiae, and the ethanol yield (0.47 g‐ethanol/g‐glucose) of rice‐hull hydrolysate was slightly lower than that of the reference medium (0.49 g/g). These results confirm that rice hull is a promising and alternative biomass for ethanol production by means of the acid impregnation and hydrolysis technique. The data obtained can be used for the design of an acid hydrolysis reactor for lignocellulosic biomass. Copyright © 2010 Curtin University of Technology and John Wiley & Sons, Ltd.