Microbial production of ethanol and 2,3-butanediol (2,3-BD) from agro-residues has been attracting interest because of their applications in various industries, including generation of biofuel molecules. In the present investigation, the hemicellulosic fraction of corncob was hydrolyzed by indigenous holocellulase from novel psychrotolerant Aspergillus niger SH3 resulting in high xylose release (34.61g L-1), followed by the bioconversion of xylose to ethanol and 2,3-BD. Taguchi design was adopted to optimize the process which resulted in 5.25- and 3.31-fold increase in 2,3-BD (12.18 +/- 0.53g L (-1)) and ethanol (4.08 +/- 0.03 g L-1), as compared with un-optimized condition. For the first time, co-production of ethanol and 2,3-BD from the corncob hemicellulosic hydrolysate was performed using a newly isolated Klebsiella oxytoca XF7 strain, under the optimized fermentation conditions. These results suggest that K. oxytoca XF7 is a promising candidate for co-production of ethanol and 2,3-BD, with high xylose conversion efficiency (96.65%), facilitating the economical production of biofuel molecules.