Barriers to the commercialization of lignocellulosic ethanol include the development of more robust biocatalysts, reduction of cellulase costs, and high capital cost associated with a complex process. Improvements have been made in all areas during the past two years. Oxidoreductases, transporters, and regulators have been identified that can increase the tolerance of biocatalysts to inhibitors formed during pretreatment. Biocatalysts are being developed that grow under conditions that are optimal for cellulase activity and others have been engineered to produce glycoside hydrolases. Ethanol yields resulting from most current process configurations are similar, approximately 0.21 g ethanol/g dry cellulosic feedstock. Potentially, this can be increased to at least 0.27 g ethanol/g biomass (83 gal/ton) using simpler processes.