Ethanol production by Flammulina velutipes from high substrate concentrations was evaluated. F. velutipes produces approximately 40-60 g l(-1) ethanol from 15% (w/v) D-glucose, D-fructose, D-mannose, sucrose, maltose, and cellobiose, with the highest conversion rate of 83% observed using cellobiose as a carbon source. We also attempted to assess direct ethanol fermentation from sugarcane bagasse cellulose (SCBC) by F. velutipes. The hydrolysis rate of 15% (w/v) SCBC with commercial cellulase was approximately 20%. In contrast, F. velutipes was able to produce a significant amount of ethanol from 15% SCBC with the production of β-glucosidase, cellobohydrolase, and cellulase, although the addition of a small amount of commercial cellulase to the culture was required for the conversion. When 9 mg g(-1) biomass of commercial cellulase was added to cultures, 0.36 g of ethanol was produced from 1 g of cellulose, corresponding to an ethanol conversion rate of 69.6%. These results indicate that F. velutipes would be useful for consolidated bioprocessing of lignocellulosic biomass to bioethanol.