Increasing demand for alternative biofuel production and the need to address the problems of environmental pollution along with energy security has led to a shift in focus towards lignocellulosic biomass. Rice straw being the most abundant lignocellulosic biomass, most of it is either used as cattle feed or used on thatched roof tops, rest either decomposed or burnt. After a certain span of time those used on roof tops are thrown away for decomposition or burnt leading to air pollution. The present study aims to resolve the food/feed versus fuel problems and to device a cost effective technique for bioethanol production. The study analyses the decrease in lignin content with ageing and optimizes the pretreatment process parameters influencing the output with maximum reducing sugars yield of 348.8 mg/g after saccharification followed by fermentation with Pichia stipitis resulting in 20.123 g/l of ethanol.