Paper mill sludges are solid waste material generated from paper making process. They are composed of pulp residues and inorganic additives. Because of high carbohydrate content, the pulp mill sludges are potential feedstock for bioconversion into value-added products. The carbohydrate portion of the sludges has similar chemical and physical characteristics as pulp. Therefore the bioconversion may be applied without pretreatment, a significant economic benefit. On the other hand, the sludges also contain high level of inorganics including calcium and aluminum salts, which may adversely affect the bioconversion process. In this study, primary and recycle sludges collected from a paper mill were investigated as feedstock for bioconversion to ethanol. The sludges were subjected to standard enzymatic digestion test with and without pH adjustment. Enzymatic digestion of the sludges without pH adjustment yielded very low sugars. After treatment with sulfuric acid, the sludges were easily digested to give 70-80% of sugar yield. The feedstocks were also put through simultaneous saccharification and Co-Fermentation (SSCF) using Spezyme-CP and recombinant E. coli (KO11). The yield of ethanol from the SSCF operated without pH control exceeded the yield of ethanol calculated from the enzymatic digestion data. The ethanol yields based on total glucan and xylan were in the range of 85-90% of theoretical maximum. The SSCF proceeded well without pH control whereas the enzymatic digestion required pH control. It was due to the fact that the sugars generated by enzyme hydrolysis were adsorbed on the salts in the sludge, most of which is calcium carbonate. In the SSCF, sugars released by cellulase enzyme were rapidly consumed by microorganism, which prevented adsorption of sugars.