A previously described techno-economic model (Gregg and Saddler, 1995a,b; Gregg and Saddler; 1996) was used to evaluate the effects of enzyme recycling and hydrolysis time on the production cost of ethanol from either hardwood or softwood substrates. Despite a significant reduction in the enzyme requirement the enzyme cost still represented about 18.5% and 22.7% of the total ethanol production cost when using either a hardwood or softwood feedstock. Enzyme recycling using the hydrolysis reactors (both hydrolysis and enzyme recycle combined in the same vessels) for two cycles reduced the ethanol cost by about 12% for both wood substrates. However; the enzyme recycling gain was less than 5% when implemented with dedicated enzyme recycle equipment (reactors and pumps). Doubling the hydrolysis time from 24 to 48 h decreased the ethanol cost by 18% for hardwoods and 27% for softwoods. The combination of enzyme recycling and doubling the hydrolysis time further decreased the ethanol cost by 11%. Consequently the lignin extraction and recovery component became the main contributor to ethanol production cost. It is probable that future benefits will likely come from incremental advances in each process step and/or a combination of a number of steps i.e., process integration, to reduce the production cost to marketable levels.