Sugarcane bagasse was characterized as a feedstock for the production of ethanol using hydrothermal pretreatment. Reaction temperature and time were varied between 160 and 200°C and 5-20 min, respectively, using a response surface experimental design. The liquid fraction was analyzed for soluble carbohydrates and furan aldehydes. The solid fraction was analyzed for structural carbohydrates and Klason lignin. Pretreatment conditions were evaluated based on enzymatic extraction of glucose and xylose and conversion to ethanol using a simultaneous saccharification and fermentation scheme. SSF experiments were conducted with the washed pretreated biomass. The severity of the pretreatment should be sufficient to drive enzymatic digestion and ethanol yields, however, sugars losses and especially sugar conversion into furans needs to be minimized. As expected, furfural production increased with pretreatment severity and specifically xylose release. However, provided that the severity was kept below a general severity factor of 4.0, production of furfural was below an inhibitory concentration and carbohydrate contents were preserved in the pretreated whole hydrolysate. There were significant interactions between time and temperature for all the responses except cellulose digestion. The models were highly predictive for cellulose digestibility (R (2) = 0.8861) and for ethanol production (R (2) = 0.9581), but less so for xylose extraction. Both cellulose digestion and ethanol production increased with severity, however, high levels of furfural generated under more severe pretreatment conditions favor lower severity pretreatments. The optimal pretreatment condition that gave the highest conversion yield of ethanol, while minimizing furfural production, was judged to be 190°C and 17.2 min. The whole hydrolysate was also converted to ethanol using SSF. To reduce the concentration of inhibitors, the liquid fraction was conditioned prior to fermentation by removing inhibitory chemicals using the fungus Coniochaeta ligniaria.