Bioethanol from inedible cellulose-rich biomass is the most promising candidate to replace fast depleting, environmentally polluting fossil fuels. Hydrolysis of cellulose to glucose is the crucial step in its biotransformation to bioethanol. Enzymatic hydrolysis is favored over acid hydrolysis, as enzymes are eco-friendly biocatalysts with high substrate specificity and superior catalytic efficiency in mild reaction conditions. Complete hydrolysis of cellulose is achieved by cellulase. Higher cellulase production yield, stability, and catalytic efficiency are the main attentive points for the successful implementation in industrial production of bioethanol. This chapter will highlight general characteristics of microbial cellulases and their role in the bioconversion of cellulose to biofuels, economic sustainability of cellulose-based biofuels, and the latest innovations in cellulase immobilization as the most comprehensive strategy for improvement of enzyme stability, activity, and reusability for cost-effective large-scale application.