Sugarcane bagasse is byproduct of sugarcane juice processing. After juice extraction, each tonne of sugarcane produces 130 kg dry weight of bagasse. The present study attempts to produce microbial bio-ethanol using sugarcane bagasse as substrate. After size reduction and chemical pretreatment of sugarcane bagasse using 1M of NaOH 35.68% of hydrolysis was achieved. Ethanol fermentation was carried out in 250 ml Erlenmeyer flask comprising pretreated SCB (30 g/100 ml) containing beads of 6.5% calcium alginate entrapped cellulase with the supplementation of 10 g/l of yeast extract as a nitrogen source using Saccharomyces cerevisiae. After 24 hours, the fermentation broth's alcohol production began, and it reached maximum after 72 hours. The estimated alcohol concentration was 8.1%, and the productivity was 1.14 ml/l/h. The central composite design (CCD) of response surface method (RSM) was used to estimate the levels of variables pH (5.0), incubation time (72 h), inoculum size (10 ml/l), and substrate concentration (40g/100ml) and the impact of their interactions on ethanol production. The fitted model's validity was assessed, and the F-test was used to control its statistical significance. The model F value was calculated to be 92.362 which imply that the model is significant. The experimental model was validated by the laboratory results.