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Spent mushroom compost (SMC), a byproduct of commercial mushroom cultivation, poses serious environmental problems that have hampered the growth of this important agro-industry. In an effort to develop new applications for SMC, we explored its use as a feedstock for bioethanol production. SMC constitutes approximately 30%w/w polysaccharides, 66% of which is glucan. Following dilute-acid pretreatment and enzymatic hydrolysis, both in the presence of PEG 6000, 97% of glucan and 44% of xylan in SMC were converted into the corresponding monosaccharides. Incorporation of PEG 6000 reduced the cellulase requirement by 77%. Zwittergent 3-12 and 3-14 also significantly increased the efficacy of acid pretreatment and enzymatic hydrolysis. The use of SMC in bioethanol production represents a potential mitigation solution for the critical environmental issues associated with the stockpiling of the major byproduct of the mushroom industry., (Copyright © 2012 Elsevier Ltd. All rights reserved.)