For almost a century gasoline has been the dominant transportation fuel around the world. Today gasoline in the USA is produced from mostly imported oil, whose escalating prices and declining availability have a significant impact on family budgets, business profitability, and national accounts. Moreover, gasoline use results in gaseous and particulate emissions that continue to pollute the air and the environment in general. Governments around the world are seriously rethinking their reliance on fossil transportation fuels by seeking alternatives, such as ethanol in the short term and hydrogen later on. They can be domestically produced and are expected to reduce dramatically automobile emissions. Ethanol is currently produced in rather small volumes primarily from corn (USA) and sugarcane (Brazil) through fermentation. It is blended with gasoline as E10 (10% ethanol), but new flexible fuel vehicles are able to run on E85. Crops like corn are convenient ethanol sources at the present time, but they cannot satisfy our increasing energy needs in the long run because there is simply not enough corn or arable land for expansion. Furthermore, corn requires significant amounts of irrigation and fertilizers straining scarce water resources, affecting soil quality, and polluting ecosystems. In contrast to crops, cellulosic biomass is an abundant non-edible feedstock that can satisfy our fuel needs if it can be converted to ethanol economically. It is available in the form of agricultural residues, such as corn stover, sugacane bagasse, and citrus peel, forestry residues, and urban waste. The conversion process is a combination of chemical and biochemical steps, which first release sugars from biomass and then ferment those sugars to ethanol. The use of enzymes and microorganisms plays a pivotal role in this process. Although significant progress has been achieved in the area during the last 10 years, there are still technical and business issues that need to be addressed before the technology is commercialized. During the presentation those critical issues will be reviewed and possible solutions developed at FIU's Applied Research Center will be discussed.