Rice straw, a common agricultural waste, is used as a potential feedstock for bioethanol production. Currently, bioethanol is made mostly from the microbial fermentation of starch-containing raw materials. Therefore, genetically engineered starch-excess rice straw through interference of starch degradation as a potential strategy to enhance bioethanol production was evaluated in this study. Arabidopsis Starch Excess 4 (SEX4) encodes a chloroplast-localized glucan phosphatase and plays a role in transitory starch degradation. Despite the identification of a SEX4 homolog in rice, OsSEX4, its biological function remains uncertain. Ectopic expression of OsSEX4 complementary DNA complemented the leaf starch-excess phenotype of the Arabidopsis sex4-4 mutant. OsSEX4-knockdown transgenic rice plants were generated using the RNA interference approach. Starch accumulation was higher in OsSEX4-knockdown suspension-cultured cells, leaves, and rice straw compared with the wild type, suggesting that OsSEX4 plays an important role in degradation of transitory starch. The OsSEX4-knockdown rice plants showed normal plant growth and no yield penalty. Starch-excess OsSEX4-knockdown rice straw used as feedstock for fermentation resulted in improved bioethanol yield, with a 50% increase in ethanol production in a vertical mass-flow type bioreactor, compared with that of the wild-type straw.