Bio-fuel production can be categorized into biodiesel and bioethanol and the most common renewable fuel today is ethanol derived from sugar. Future large-scale use for ethanol will most certainly have to be based on production from lignocellulosic materials due to its abundance in food crop waste. This article gives an overview on paddy straw biotransformation into ethanol. Rice straw has lignocellulosic material for bioethanol production since it is one of the most abundant renewable resources. Paddy straw especially, has favorable characteristics such as high hemicellulose and cellulose content that can be readily hydrolyzed into fermentable sugars. However, one of the major challenges in developing technology for bioethanol production from paddy straw is selection of an appropriate pre-treatment and fermentation method.