Ethanol production in the United States is expected to increase to 7.5 billion gallons by 2012 from its current production of 4.5 billion gallons. This increase would also result in generation of huge quantities of low-value, lignocellulosic coproducts-corn fiber and distillers dried grain (DDG). Conversion of large amounts of the low-value lignocellulosic biomass into high-value products like ethanol is needed for sustainability of corn processing industries. Breakdown of lignin followed by saccharification of the cellulose could liberate simple sugars for subsequent yeast fermentation to ethanol. In this research, laboratory-scale solid state fermentation (SSF) of corn fiber from a wet milling corn plant using the white rot fungus Phanerochaete chrysosporium was carried out in 1L polypropylene bottles. P. chrysosporium produced extracellular enzymes in situ for lignin degradation and saccharification of cellulose to release sugars. Anaerobic incubation of P. chrysosporium SSF in buffer solution (pH 4.73 and 37°C) reduced the fungal sugar consumption and enhanced the cellulolytic enzyme activities in situ with the subsequent release of additional sugars for yeast fermentation to ethanol. A 5-day P. chrysosporium culture under anaerobic conditions converted 2.5 % of corn fiber into reducing sugars. Whereas, maximum biomass weight loss was about 34% by day 14. Investigation of P. chrysosporium ligninase inducers (H₂O₂, veratyrl alcohol, and MnSO₄) demonstrated 41% Klason lignin reductions for 14 day SSF culture bottles with 300 mM MnSO₄ exhibiting the greatest reduction. The production of extracellular polysaccharides (EPS) by the white-rot fungus during SSF was also investigated by mild acid (0.1N sulfuric acid) hydrolysis which illustrated a 2-fold increase in acid soluble sugars between the day-9 and day-10 SSF culture bottles. Saccharomyces cerevisiae fermentation of the hydrolysates from P. chrysosporium SSF and mild acid treatment of SSF produced 4 mg ethanol /g fiber. This suggested low concentrations of fermentable sugars in the hydrolysates. Further studies are needed to optimize SSF protocols in simultaneous saccharification and co-fermentation using wood rot fungi and yeasts for economical ethanol production from the corn fiber and other lignocellulosic biomass.