The prime effort of the present investigation is to release the complex mixtures of cellulose and hemicellulose by delignification of cotton gin waste using a mixed culture of Trametes pubscens and Pycnoporus cinnabarinus. The delignification process was found to be efficient in the release of cellulose and hemicellulose and the pretreated biomass accessed to hydrolysis by producing C6 sugar. It is further examined that the solid-state cultivation (SSC) achieving 57.5% of lignin removal was more efficient than the submerged state of cultivation (SMC) with 45.6% of delignification. The corresponding cellulose and hemicellulose release was measured as 64 and 68.5% in SSC. The delignification was further confirmed by FTIR, XRD, and SEM analysis of pretreated and untreated cotton gin waste. The pretreatment process was further optimized by a response surface model that achieved 63.2% delignification in SSC. The enzymatic hydrolysis of delignified waste biomass resulted in 22.06 g/l sugar concentration after 48 h. The mixture of glucose and xylose-rich hydrolysates (32.17 g/l sugars) was fermented with co-culture of the yeast strains Saccharomyces cerevisiae and P. stipitisstrains, which resulted in 13.05 g/l ethanol concentration with 0.40 g/g ethanol yield after 64 h. Thus it has been demonstrated that the delignification of cotton gin waste using mixed culture and fermentation using co-culture of yeast strains was efficient for bioethanol production.