Gracilaria sp. is the most productive alga cultured in Taiwan. It contains 76.27% carbohydrate (dry-base weight, 8.41% crude fiber among them). After algal polysaccharides extraction, the remaining residues could be used as the source of bioethanol through saccharification treatment. The response surface methodology was applied to obtain an optimal agar extraction method that dried Gracilaria was immersed in 0.02-N sulfuric acid solution for 0.3 hr, and then extracted with boiling water (100oC) for 0.3 hr. Base on the algal polysaccharides content in the collected Gracilaria sp., the algal polysaccharides extraction rate was calculated to be 64.8%; this method has threefold higher extraction rate than the direct boiling water extraction method. The residues of algae residues still contained a high amount of carbohydrate (dry-base weight, 60.93%, which contained 23.91% cellulose). The algal residues were treated with acid, cellulase or cellulase-then-acid to assess their saccharification efficiencies. The results showed that the highest saccharification efficiency was observed when the algal residues were treated with 1.0% cellulase and then treated with 0.9 N sulfuric acid, which was heated in an autoclave at 121°C for 1 hr. Based on the algal residues crude fiber and algal polysaccharides,, the hydrolysis yields of glucose and galactose were calculated to be 95.0% and 43.5%, respectively.