The present research deals with the development of a hybrid yeast strain with the aim of converting pentose and hexose sugar components of lignocellulosic substrate to bioethanol by fermentation. Different fusant strains were obtained by fusing protoplasts of Saccharomyces cerevisiae and xylose-fermenting yeasts such as Pachysolen tannophilus, Candida shehatae and Pichia stipitis. The fusants were sorted by fluorescent-activated cell sorter and further confirmed by molecular characterization. The fusants were evaluated by fermentation of glucose-xylose mixture and the highest ethanol producing fusant was used for further study to ferment hydrolysates produced by acid pretreatment and enzymatic hydrolysis of cotton gin waste. Among the various fusant and parental strains used under present study, RPR39 was found to be stable and most efficient strain giving maximum ethanol concentration (76.8 +/- 0.31 g L-1), ethanol productivity (1.06 g L-1 h(-1)) and ethanol yield (0.458 g g(-1)) by fermentation of glucose-xylose mixture under test conditions. The fusant has also shown encouraging result in fermenting hydrolysates of cotton gin waste with ethanol concentration of 7.08 +/- 0.142 g L-1, ethanol yield of 0.44 g g(-1), productivity of 0.45 g L-1 h(-1) and biomass yield of 0.40 g g(-1).