Recent legislation has set ambitious targets for cellulosic ethanol to be realized in the not-too-distant future. While corn-based ethanol will continue to be the most important supply, its share—but not the quantity—will diminish over time. How agriculture responds to market and environmental challenges will be in large part governed by the evolution and adoption of cellulosic ethanol production technology. One possible scenario is that development of cellulosic production technology occurs more rapidly than expected, before the establishment of alternative cellulosic feedstocks, enabling crop residues to be used in lieu of corn during the transition to dedicated energy crops. This article examines the market and environmental consequences of shifting biofuel production from corn to cellulosic production technology fed by crop residues. Results show that reducing corn required for ethanol by increasing production of crop residue-based cellulosic ethanol shifts crop production and changes tillage and rotation choice. These changes demonstrate mixed effects on key environmental indicators, with benefits and adverse consequences varying regionally.