Mycelial pellet formation by filamentous fungi is one of the most researched topics in fungal biotechnology research. Pellets are generally formed as a result of a complex interaction process through the influence of many cultivation factors such as inoculum size, pH, dissolved oxygen level, agitation system, nucleating agents, additives, trace metals, CO2, temperature, reactor types, carbon substrate, rheology, culture modes, fermenter geometry, nitrogen and phosphate levels etc. Each factor has varying effects on the growth morphologies of different fungal species. Fungal growths in the form of pellets have several advantages and pose a potential solution to overcome the problems associated with the filamentous fungal growth in large scale industrial bioreactors. The aim of the present work was to study pellet formation of edible filamentous fungus Neurospora intermedia, focusing on the molecular aspects of the fungal pellets with special interest to investigate the role of cell signaling second messenger cyclic 3', 5’-adenosine mono- phosphate (cAMP). It was found that Neurospora intermedia stimulate cAMP in the pellet form than filamentous form. The industrial applications of fungal pellets for generating value added products were also studied and observed fermentation in individual and co fermented first and second-generation ethanol substrate, showed an ethanol yield maximum of 0.25 ± 0.05 g/g dry substrate. The growth of fungal pellets in presence of inhibitors (such as acetic acid, HMF and furfural) resulted in about 11% to 45% increase in ethanol production as compared to filamentous forms, at similar growth conditions in the liquid straw hydrolysate.