Sugarcane bagasse hydrolysis was optimized by dilute‐acid pretreatment and subsequent enzymatic treatment. The studied parameters were microwave heating temperature, residence time, and enzyme dosage as the main factors in a central composite design. The amount of released total reducing sugars, glucose, pentose, phenolic compounds, and furfural were measured after each stage. The optimum conditions with suitable concentrations of inhibitors and reducing sugars were applied for bioethanol production. As an example, ethanol was obtained from reducing sugars by Pichia stipitis without detoxification.