Agricultural waste rice straw has been used for the production of cellulase enzyme required for bioethanol production via Trichoderma reesei. Pretreatment of lignocellulosic rice straw is required for this process which releases the toxic inhibitors along with soluble sugars. Simultaneous biological detoxification and enzyme production using rice straw as cellulose source have been investigated. T. reesei has shown capability of complete consumption of all the inhibitors along with cellulase production. A feeding approach of pretreated solid bagasse in liquid hydrolysate-grown culture has been developed to optimize the enzyme production, concomitant reduction of inhibitors and xylose utilization. Using this feeding strategy, FPase and CMCase production increased by 7- and 6-folds, respectively, compared to culture grown in whole slurry mixture (Rice straw control (RSC)). With early feeding approach, filter paper activity (FPase) and carboxymethyl cellulase activity (CMCase) production also increased by 14- and 10-folds, respectively, compared to late feeding.