Gracilaria sp., a red alga, was used as the material for bio-ethanol production. In this study the hydrolytic processes for sugar conversion and yeast fermentation conditions were tested. The process of the highest amount of fermentable sugars obtained was that 10.0% Gracilaria (w/w, dry base) was prepared in a 0.5 N H2SO4 solution and then autoclaved for 60 min at 121oC. High performance liquid chromatography (HPLC) was used to analyze the hydrolysate: galactose 20-27 mg/mL, glucose 2-5 mg/mL, 5-hydoxymethyl furfural (HMF, an ethanol fermentation inhibitor) 4-6 mg/mL; there was no fufural (also an ethanol fermentation inhibitor) found in the HPLC profile. The hydrolysate was further treated with overliming by adding sodium hydroxide, calcium hydroxide or calcium oxide. Results showed that the HMF in the hydrolysate reduced to less than 50% with each of the treatments. The overlimed hydrolysate was prepared as media for ethanol production with 38 different yeast strains’ fermentation. It was found that the competent strains were B4 and B10, which could produce about 10 and 8 g ethanol per liter, respectively. Inoculated with mixed starters of B4 and B10, 1:1, a highest yield of ethanol, 0.34 g/g substrate, was achieved in a batch culture at the 7th day.