As the biggest developing country, China faces a serious challenge in satisfying its need for huge amounts of energy resources, especially for liquid fuel. The Chinese government has recently started a bioethanol project, and has produced about 1 million tons of ethanol fuel from corn and wheat in 2005. As it has the largest population in the world and limited lands for food production, cellulosic ethanol would be a more suitable choice for China. Many research projects in China on biodegradation and biotransformation of lignocellulosics have been carried out. Furthermore, understanding the biodegradation mechanism of lignocellulosics and developing practical processes for ethanol production have been ongoing. After more than 30 years of research, several pilot scale facilities have been set up, and lots of experience has been acquired. However, the calculated production cost of cellulosic ethanol is still higher than that of corn ethanol. To overcome this problem, the biorefinery conception has been introduced into research on lignocellulosics transformation. A corncob biorefinery process has been developed in Shandong University. By combining the cellulase and ethanol production with a xylose-related products production, the total production cost can be reduced. A scale of 50,000-ton/year cellulosic ethanol biorefinery is being planned to be built at Yucheng.