In an attempt at improving bioethanol production, a bench-scale comparison has been performed between the traditional one-step process of sugarcane bagasse hydrolysis with 70 % sulfuric acid, and a modified operation including a second step with more dilute acid, at higher temperature. The influence of the reaction time, the percentage of solids in the sugarcane bagasse suspension and temperature on the hydrolysis efficiency, was investigated. Although the modified protocol allows for an appreciable improvement in the yield of conversion to fermentable sugars in comparison to the one-step hydrolysis, a technical/economical analysis demonstrated that it would demand higher production costs and a longer payback period. Therefore, the latter process should be recommended for the setting up of a pilot plant with a production capacity of 80 m(3) of alcohol per day.