Rice straw (RS) is one of the most prevalent agricultural wastes that can be obtained cheaply and used as a permanent source of biofuel. The saccharification of lignocellulosic wastes is a vital and expensive process in fermentable sugars and bio-ethanol production; therefore, this study focused on maximizing the quantity of fermentable sugars by fungal hydrolysis. In this study, twenty-four fungal isolates were isolated from different lignocellulosic biomass (RS, Water hyacinth, Bagasse, and Saw Dust). RS was subjected to a biological hydrolysis process employing a combination of fungal isolates. Then the resulting sugar is fermented by Saccharomyces cerevisiae to bioethanol. The most promising fungal isolate for hydrolysis was the combination of Trichoderma harzianum and Aspergillus terreus which produced the maximum amount of sugar (13.431 mg/ml). The Response Surface Methodology (RSM) with a Central Composite Design (CCD) was utilized to statistically analyze and optimize the conditions (incubation time, temperature, biomass concentration, and inoculum size) for achieving a maximum total reducing sugars (TRS) production. Under the optimal conditions (12 days of incubation, 20% biomass concentration, 25°C, and 1.14 ml of inoculum size), the study achieved a maximum TRS production of 17.212 mg/ml. This amount of TRS is fermented by Saccharomyces cerevisiae to produce 11.05ml/l of bioethanol. This research emphasizes the significance of rice straw as a renewable waste for bioethanol production. Furthermore, this study demonstrates the relevance of fungal hydrolysis for maximal fermentable sugar production from rice straw. As a result, this study has accomplished two goals: the elimination of rice straw and biofuel production.