Bioconversion of sludge from the primary clarifier of a sulphite pulping operation to ethanol offers a number of advantages over conventional disposal options. The amount of material which must be disposed of is reduced while, at the same time, salable and environmentally friendly fuel-ethanol is produced. In this study, primary clarifier sludge (PCS) was shown to be hydrolysed to produce fermentable sugars at a rate proportional to enzyme loading. Initial (1 hour) hydrolysis rates as high as 12.6 g reducing sugar/L.h were observed at an initial enzyme loading of 10 filter paper units (FPU)/g. Hydrolysis was inhibited by spent sulphite liquor (SSL), an inhibition which could be completely overcome by fermenting the SSL to remove sugars. Surfactants were found to only marginally improve the production of sugars. To reduce the deleterious effects of end product inhibition, single stage simultaneous hydrolysis and fermentation (SHF) was carried out using cellulase enzymes and Saccharomyces cerevisiae.