Conditions for optimal pretreatment of eucalypt (Eucalyptus dunnii) and spotted gum (Corymbia citriodora) forestry thinning residues for bioethanol production were empirically determined using a 3(3) factorial design. Up to 161mg/g xylose (93% theoretical) was achieved at moderate combined severity factors (CSF) of 1.0-1.6. At CSF>2.0, xylose levels declined, owing to degradation. Moreover at high CSF, depolymerisation of cellulose was evident and corresponded to glucose (155mg/g, ∼33% cellulose) recovery in prehydrolysate. Likewise, efficient saccharification with Cellic® CTec 2 cellulase correlated well with increasing process severity. The best condition yielded 74% of the theoretical conversion and was attained at the height of severity (CSF of 2.48). Saccharomyces cerevisiae efficiently fermented crude E. dunnii hydrolysate within 30h, yielding 18g/L ethanol, representing a glucose to ethanol conversion rate of 0.475g/g (92%). Based on our findings, eucalyptus forest thinnings represent a potential feedstock option for the emerging Australian biofuel industry.