Cellulosic biomass has been widely used as a feedstock for biofuel applications due to its low-cost, renewability and abundance. However, the production of liquid biofuels is still costly and inefficient mainly due to the recalcitrant structure of lignocellulosic biomass. It requires expensive pretreatment methods to break down the plant cell wall, and efficient enzymes capable of hydrolysing cellulose into glucose. One possible solution to make bioethanol production cost-effective and, at the same time, increase the energy output from the biomass is genetic engineering. Genetic modification has been reported as an effective strategy to increase productivity, biomass yields and specific traits of various agricultural plants. This paper provides an overview of the potential of cereal-based agricultural waste as a feedstock for bioethanol production. It focuses on the progress of different techniques used in genetic modification (transgenesis, cisgenesis mutagenesis and conventional breeding) to genetically engineer plant cell wall. Utilization of genetic modification of cereal plants is proposed as a solution to high costs and low yields of bioethanol production from cereal-based agricultural waste.