One significant obstacle impeding the large scale production of fuels and chemicals from cellulosic biomass is the lack of a low cost processing technology. The conventional biochemical platform for biorefinery involves five distinct steps: pretreatment, enzymatic hydrolysis, fermentation, and product recovery. Sugars are produced as the reactive intermediate for the subsequent fermentation. Steps involved with overcoming the recalcitrance of cellulosic biomass (pretreatment, cellulase production, and enzymatic hydrolysis) are the three most costly steps in the whole process. In a novel biochemical platform for fuels and chemical production,  the three most costly steps in the conventional platform is replaced with a single biological step. Cellulolytic microorganism(s) that can secrete all the enzymes needed to hydrolyze cellulose and hemicellulose in spite of the presence of lignin will be modified to convert most of the carbohydrate contained in the cellulosic biomass to sugar aldonates. In a second step, sugar aldonates will be utilized as the carbon source to produce ethanol and other products. Our study has revealed that cellulose contained in un-pretreated rice straw can be diverted to sugar aldonates production using a Neurospora crassa strain with multiple copies of beta-glucosidase gene knocked out and cellobiose dehydrogenase over-expressed. The inhibition effect of cellobionate on strain growth and cellulase production is also studied.