A process is defined for the continuous steam pretreatment and fractionation of bagasse to produce a concentrated cellulose solid stream that is sensitive to enzymatic hydrolysis. Valuable chemicals are recovered by fractionating the liquid and vapor stream composed of hydrolysis and degradation products of the hemicellulose. Cellulosic derived glucose is produced for fermentation to biofuels. A hemicellulose concentrate is recovered that can be converted to value added products including ethanol.