To produce fermentable sugars from the alkali pretreated rice straw using fungus and their enzymes by biodegrading processes, first the fungus was grown on the rice straw by solid state fermentation method. Then enzymes were isolated and applied for the hydrolysis of rice straw. To improve the production of enzymes the growth conditions via initial pH of the growth substrate, moisture content, incubation time and additional nutrients were optimized. The maximum enzyme (221.32±9.62 (U/g) Carboxymethyl-cellulase, 12.21 ±0.29 (U/g) Filterpaperase, 74.32±1.62 (U/g β-Glucosidase) and 317.32 ±7.98 (U/g) xylanase) activities were obtained at pH 7.0, 90% moisture content, and incubation period of 96 hours of solid state fermentation. The hydrolysis of the rice straw using the fungal culture filtrate (3%) in 10 hours resulted the yields of 33.56g/l reducing sugars. It indicated that the enzyme solution fabricated in the lab from the fungal fermentation is highly effective for the production of fermentable sugars.