Shandong University has long been engaged in the basic and applied research of cellulases.By using proprietary industrial cellulase over-producing strains of Penicillium decumbens, using xylose residue and other waste as the main compenent of medium, and on-site producing crude cellulase fermentation broth in order to avoid the increased cost of processing enzyme preparation and large scale transportation, the enzyme cost for cellulosic ethanol production has been significantly reduced.We proposed a technical route to use corncob-xylose processing residue to produce cellulases and fuel ethanol.By successful producing value-added products such as xylitol, xylooligosaccharides etc from corncob hemicellulose, the solid structure of cellulose, lignin had been loosened during the processing, providing a raw meterial which is easy to be enzymatic hydrolysed for the next step.The cost of raw materials and pretreatment can be merged into the production cost of high value-added products, the economics of cellulosic ethanol production was improved remarkably.Since hemicellulose part of the corn cob has been converted into high-value products, the difficulties in hemicellulose to ethanol conversion has been solved.The remaining lignin can also be used to produce high-value chemical products, to form diversification of products and reasonable industrial structure, thereby increasing the overall economic benefits of the production process.On the basis of these technological inventions, we have built a first pilot plant and a set of demonstration unit,which can produce 3,000 and more than 10,000 tons of cellulosic ethanol per year from corncob residues.