The production of ethanol from cellulose for use as a liquid transportation fuel requires a combination of process engineering, microbiology, and accessibility to feedstock. The feedstock must be available to supply the plant 24 hours / day, 7 days per week. Siting of the plant is key to ensuring feedstock supply. Conversion of the feedstock to sugars and to ethanol requires pretreatment, hydrolysis, and fermentation. Pretreatment softens up the plant cell wall structure and enables enzymes to access the cellulose so that they may catalyze the formation of monosaccharides. The monsaccahrides, in turn, may be converted to ethanol through microbial fermentation by yeast or bacteria that have been engineered to convert both glucose and xylose to ethanol. During the bioconversion steps, cascading molecular control of enzyme activity occurs due to inhibitors that are formed during the pretreatment and/or hydrolysis steps. This paper discusses the role of process engineering in addressing issues of inhibition, solids loading, and fermentation, and gives a review of fundamental mechanisms and future research needs for converting renewable resources to biofuels in a cost effective manner.