Disclosed is a method of producing ethanol from lignocellulosic biomass, including a two stage steam pretreatment process. The first stage of the steam pretreatment is carried out by heating the biomass with high pressure steam to a first stage temperature of 140° C. to 180° C. for a first stage time of 30 minutes to 2 hours at a first stage pressure of 105 to 150 psig; and the second steam pretreatment stage is carried out by heating the biomass with high pressure steam to raise the biomass temperature to a second stage temperature of 190° C. to 210° C. for a second stage time of 2 to 10 minutes at a second stage pressure of 167 to 262 psig. Hemicellulose and inhibitors (inhibitory compounds) to downstream hydrolysis and fermentation are preferably removed between the first and second pretreating stages, more preferably after each pretreatment stage.