The present study reveals the perspective and challenges of bio-ethanol production from lignocellulosic materials in Malaysia. Malaysia has a large quantity of lignocellulosic biomass from agriculture waste, forest residues and municipal solid waste. In this work, the current status in Malaysia was laconically elucidated, including an estimation of biomass availability with a total amount of 47,402 dry kton/year. Total capacity and domestic demand of second-generation bio-ethanol production in Malaysia were computed to be 26,161 ton/day and 6677 ton/day, respectively. Hence, it was proven that the country's energy demand can be fulfilled with bio-ethanol if lignocellulosic biomass were fully converted into bio-ethanol and 19% of the total CO(2) emissions in Malaysia could be avoided. Apart from that, an integrated national supply network was proposed together with the collection, storage and transportation of raw materials and products. Finally, challenges and obstacles in legal context and policies implementation were elaborated, as well as infrastructures shortage and technology availabilities.