Rice straw, a common agricultural waste, is used as a potential feedstock for bioethanol production. Currently, bioethanol is made mostly from the microbial fermentation of starch‐containing raw materials. Therefore, genetically engineered starch‐excess rice straw through interference of starch degradation as a potential strategy to enhance bioethanol production was evaluated in this study. Arabidopsis Starch Excess 4 (SEX4) encodes a chloroplast‐localized glucan phosphatase and plays a role in transitory starch degradation. Despite the identification of a SEX4 homolog in rice, OsSEX4, its biological function remains uncertain. Ectopic expression of OsSEX4 complementary DNA complemented the leaf starch‐excess phenotype of the Arabidopsis sex4‐4 mutant. OsSEX4‐knockdown transgenic rice plants were generated using the RNA interference approach. Starch accumulation was higher in OsSEX4‐knockdown suspension‐cultured cells, leaves, and rice straw compared with the wild type, suggesting that OsSEX4 plays an important role in degradation of transitory starch. The OsSEX4‐knockdown rice plants showed normal plant growth and no yield penalty. Starch‐excess OsSEX4‐knockdown rice straw used as feedstock for fermentation resulted in improved bioethanol yield, with a 50% increase in ethanol production in a vertical mass‐flow type bioreactor, compared with that of the wild‐type straw.