Fuel ethanol can be produced from softwood through hydrolysis in an enzymatic process. Prior to enzymatic hydrolysis of the softwood, pretreatment is necessary. In this study, two-step steam pretreatment employing dilute H2SO4 impregnation in the first step and SO2 impregnation in the second step, to improve the overall sugar and ethanol yield, was investigated. The first pretreatment step was performed under conditions of low severity (180degreesC, 10 min, 0.5% H2SO4) to optimize the amount of hydrolyzed hemicellulose. In the second step, the washed solid material from the first pretreatment step was impregnated with SO2 and pretreated under conditions of higher severity to make the cellulose more accessible to enzymatic attack, as well as to hydrolyze a portion of the cellulose. A wide range of conditions was used in the second step to determine the most favorable combination. The temperatures investigated were between 190 and 230degreesC, the residence times were 2, 5, and 10 min; and the SO2 concentration was 3%. The effect of pretreatment was assessed by both enzymatic hydrolysis of the solids and by simultaneous saccharification and fermentation (SSF) of the whole slurry, after the second pretreatment step. For each set of pretreatment conditions, the liquid fraction was also fermented to determine any inhibitory effects. Ethanol yield using the SSF configuration reached 66% of the theoretical value for pretreatment conditions in the second step of 210degreesC and 5 min. The sugar yield using the separate hydrolysis and fermentation configuration reached 71% for pretreatment conditions of 220degreesC and 5 min.