The conversion of lignocellulosic biomass continues to develop as a potential alternative source of transportation fuel. The major process steps involve pretreatment to degrade or disengage lignin, saccharification to depolymerize cellulose to sugars, and fermentation of sugars to ethanol. Recent, significant economic improvements in enzymatic saccharification have been made through DOE's support of projects by Novozymes and Genencor. This leaves pretreatment costs as a key obstacle to the lignocellulosic ethanol commercialization. Lignin is the most abundant biopolymer after cellulose. It inhibits enzymatic hydrolysis of cellulose, and process designs typically consign its recalcitrant, low-value forms to boilers. However, lignin, in appropriate molecular weight ranges, is a suitable component of phenolic resin plastics. The objective of this work is to apply microbial conditioning before and after pretreatment, to enhance ethanol yield and lignin extraction. The aim is to improve the performance observed with pretreatment, allowing reductions in severity and complexity to reduce costs and improve the economics for the biomass grower. In this work, Corn stover, switch grass and giant miscanthus were obtained, and inocula, such as bacteria from rumen, brewery waste, thermal springs, and wood-eating insect guts were screened and applied to the biomass before and after pretreatment. These included dilute acid pretreatment, expansion from high pressure and centrifugation, and Ammonia Fiber Explosion (AFEX). The conditioned biomass was subjected to simultaneous saccharification and fermentation (SSF) according to DOE-NREL protocol. Ethanol production for screening tests was estimated from carbon dioxide production, and results validated for select samples using HPLC. Residual lignin was subjected to mild acid washing and filtration. We have conducted prescreening and developed protocols using HPLC to determine solubilization of biomass components, and shifts in lignin molecular weight. As needed, IR techniques are used to evaluate changes in functional groups. As an applied component of our research, we have evaluated the residual lignin as an adhesive. Lignin has been incorporated into a soybean protein adhesive formulation and its effect on particleboard properties determined relative to the control particleboard.