Most of the hemicellulose fraction of pulp mill feedstock (softwood or hardwood) is released into black liquor during pulping process. The black liquor is burned to recover chemicals and generate of steam and electricity. It is technically feasible to recover this fraction of carbohydrate and enhance its value by converting it into value-added products. Hemicellulose is selectively converted to soluble sugars (termed as prehydrolysate) treating it by acid catalyst. The sugars produced from prehydrolysis are mixtures of pentose, hexose, and their oligomers. In this study, pectinase and ethanologenic microorganism Escherichia coli or Saccharomyces cerevisiae are used to convert the pre-hydrolysate into ethanol. The prehydrolysates produced from acid-treatment of wood also contain toxins, primarily lignin and sugar degradation products. They strongly inhibit to microbial action. De-toxification was done by overliming (addition of excess Ca(OH)₂) and 1% H2O2 oxidizing of hydrolysate. The hydrolysate obtained by acid treatment of wood has the total sugar concentration below 4 wt. %. If it is used as a fermentation substrate, the ethanol concentration is less than 2.5%, which is far below the level acceptable as distillation feed. Use the mixture of prehydrolysate and pulp mill sludges as the fermentation feed as a means to increase the product concentration. In bioconversion of the sludge, a certain amount of water is added to attain fluidity required for SSF operation. In this study, prehydrolysate, in place of water, is added into the bioreactor along with the sludge. Under the proposed scheme, there is a net increase of total sugar concentration in the bioreactor above that of the base case. Therefore, the product concentration is also increased, reducing the cost of ethanol distillation.