At temperatures above 140ºC (10 min), a low level  of phosphoric acid  (1% w/w on dry bagasse basis) was shown to hydrolyze most of the hemicellulose in sugar cane bagasse into monomers with minimal side reactions while also serving as an effective initial treatment for the enzymatic hydrolysis of cellulose. Up to 40% of the resulting water insoluble solids (WIS) was digested to glucose by low concentrations of Biocellulase W (10 ml/kg WIS; 0.5 filter paper unit/g WIS) supplemented with β-glucosidase.  Much higher levels of cellulase (100-fold) were required for complete hydrolysis. After neutralization and nutrient addition, phosphoric acid syrups containing hemicellulose sugars were fermentable by ethanologenic E. coli LY160 without prior purification.  Fermentation of these hemicellulose syrups was preceded by a lag which increased with treatment temperature. With further improvements in organisms and optimization of steam treatment conditions, it may be possible to co-ferment sugars derived from hemicellulose and cellulose and eliminate early process steps for liquid-solid separation, sugar purification, and separate fermentations.  The incremental increase in fermentable sugars with added cellulase (maximum of 30 kg glucose/L for Biocellulase W) was proposed as an approach to estimate the value of commercial cellulases for biofuel production.  Using a phosphoric acid steam treatment at 160°C or above, predicted ethanol production based on solublized sugars per metric ton (dry weight; assuming 90% overall efficiency of ethanol production and recovery) ranged from 66 gal (0.5 filter paper units/g WIS) to 110 gal (50 filter paper units/g WIS).