<P><B>Abstract</B></P> <P>The present study highlights the development of a combined pretreatment and hydrolysis strategy of rice straw for the production of bioethanol and biopolymer (poly-3-hydroxybutyrate). Maximum reducing sugar yield was 0.374g/g. The hydrolyzate is devoid of major fermentation inhibitors like furfural and organic acids and can be used for fermentation without any detoxification. Fermentation of the non-detoxified hydrolyzate with <I>Saccharomyces cerevisiae</I> yielded 1.48% of ethanol with a fermentation efficiency of 61.25% and with <I>Comamonas</I> sp. yielded 35.86% of poly-3-hydroxybutyrate without any nutrient supplementation. Characterization of native, control as well as the residue left out after combined pretreatment and hydrolysis of RS by scanning electron microscopy and X-ray diffraction showed difference. Compositional analysis revealed that the residue contains lignin and hemicellulose as the major component indicating that major portion of cellulose were hydrolyzed in this strategy.</P> <P><B>Highlights</B></P> <P> <UL> <LI> First report on combined pretreatment and hydrolysis of rice straw. </LI> <LI> Fermentation of the hydrolyzate yielded bioethanol and biopolymer. </LI> <LI> Maximum reducing sugar yield was 0.374 g/g of dry biomass. </LI> <LI> Hydrolyzate is devoid of fermentation inhibitors like organic acids and furfurals. </LI> <LI> Residue contains hemicellulose and lignin as the major component. </LI> </UL> </P>