Ethanol is the most commonly used biofuel in the world, its demand increasing with time. Due to the steady rate of depletion of fossil fuels, bioethanol is emerging as an alternative fuel source. Unlike fossil fuels, bioethanol is a clean fuel that is environment friendly and causes little pollution. It is an alcohol, resulting from the fermentation of sugars, starches or cellulose, derived from crops such as wheat, corn, sugar beets, sugarcane, agricultural residues or any other lignocellulosic biomass. The production is a multi-step process that includes a range of pre-treatments, enzymatic hydrolysis and fermentation. The final product, ethanol, is obtained from the final step of fermentation that is carried out with the help of microorganisms like yeast or bacteria, or even a combination of microorganisms. Researches are being carried out to genetically engineer or find natural indigenous microorganisms that are capable of producing specific enzymes required for the production of bioethanol in large amounts that is suitable for industrial scale. Bioethanol is currently being blended with gasoline and used as automobile fuel for vehicles with gasoline engines. In this article, the various sources of raw materials that can be used for bioethanol production have been discussed, along with descriptions of the different production steps involved in the generation of bioethanol on an industrial scale.