Switchgrass (Panicum virgatum L.), a perennial C4 warm-season grass native throughout North America, has been developed into an herbaceous bioenergy crop. Recalcitrance to saccharification is one of the major limitations for conversion of lignocellulosic biomass into ethanol. A transgenic approach has been taken to genetically modify lignin biosynthesis and potentially improve bioconversion properties of switchgrass. Major lignin biosynthetic genes were isolated from switchgrass and transgenic plants carrying RNAi constructs were obtained by Agrobacterium tumefaciens-mediated transformation. Analyses of the transgenic switchgrass plants by RT-PCR and real time PCR revealed that expression levels of the endogenous genes were down-regulated. Reduced enzyme activity, decreased lignin content and altered lignin S/G ratios were found in these transgenic lines. The down-regulation of lignin biosynthesis resulted in improved sugar recovery. A strong positive correlation between reduced lignin content and saccharification efficiency was found in the regenerated switchgrass lines. A lower S/G ratio correlated well with improved efficiency of carbohydrate conversion. Ethanol production from the lignin down-regulated transgenic materials was significantly increased.