Sugarcane processing generates a large volume of bagasse. Disposal of bagasse is critical for both agricultural profitability and environmental protection. Sugarcane bagasse is a renewable resource that can be used to produce ethanol and many other value added products. In this study, we demonstrate that cane processed bagasse could be used to produce fuel grade ethanol. A chemical pre-treatment process using alkaline peroxide and acid hydrolysis was applied to remove lignin, which acts as physical barrier to cellulolytic enzymes. Yeast Saccharomyces cerevisiae ATCC strain 765 was used in the experiment. The pre-treatment process effectively removed lignin. Ethanol production in the culture sample was monitored using high performance liquid chromatography. The results indicate that ethanol can be made from the sugarcane bagasse.