Abstract Optimization of alkaline pretreatment of sugarcane bagasse for consolidated bioprocessing fermentation by the cellulose-fermenting fungus Phlebia sp. MG-60 was studied. The lignin and xylan contents of bagasse were decreased and ethanol production from each pretreated sugarcane bagasse by MG-60 was increased in an alkaline concentration-dependent manner. The fungus produced cellulase and xylanase rapidly over 120 h. When this fungus was cultured with 20 g L −1 of sugarcane bagasse pretreated with NaOH (0.8 wt%, 121 °C, 60 min), 4.5 g L −1 ethanol was produced, equivalent to 210 mg ethanol per gram of the original untreated bagasse after 240 h fermentation, giving ethanol yields of 65.7% of the theoretical maximum. These data suggest that Phlebia sp. MG-60 is a potential candidate for ethanol production from alkali-pretreated bagasse in a single bioreactor, without enzymatic or chemical hydrolysis.