Abstract Rice straw is the most abundant agricultural residue on a global scale and is widely available as feedstock for cellulosic fuel production. However, it is highly recalcitrant to biochemical deconstruction and also generates inhibitors that affect enzymatic saccharification. Rice straw from eastern Arkansas was subjected to dilute acid pretreatment (160 °C, 48 min and 1.0% sulfuric acid) and solid-state fermentation with two lignocellulolytic fungi, Trametes hirsuta and Myrothecium roridum, and their saccharification efficacies were compared. T. hirsuta and M. roridum were tested separately; pretreatment of rice straw with either strain for seven days resulted in 19 and 70% enrichment of its holocellulose content, respectively. However, liquid chromatography analysis of the alkali extracts showed significant differences in cell wall degradation by T. hirsuta and M. roridum. T. hirsuta removed 15% more phenolic compounds and 38% more glucan than M. roridum, while M. roridum removed 77% more xylan than T. hirsuta. Fungal and dilute acid pretreated biomass was then hydrolyzed using Accellerase® 1500, a saccharification cocktail. Saccharification efficiency of M. roridum was 37% higher than that of dilute acid pretreatment of rice straw, requiring 8% lower enzyme loading and 50% shorter enzymatic hydrolysis duration. Alkali extraction of fungal pretreated biomass also yielded 10–15 g kg−1 of acid precipitable polymeric lignin (APPL), which is a valuable co-product for biorefineries. In comparison to dilute acid pretreatment, fungal pretreatment could be a cost-effective alternative for the degradation of recalcitrant biomass, such as rice straw.