This paper discusses the likely growth in the production of ethanol from grain in the United States over the next 4 to 5 years. It describes how the costs of production have changed and some of the major factors that are likely to impact profitability and rate of growth in the industry over this period. It discusses co-product production and utilization, and the impact of expanding ethanol production on land use. The final section briefly discusses recent progress in the production of liquid fuels from cellulose.