A large amount of industrial wastewater containing pollutants including toxic dyes needs to be processed prior to its discharge into the environment. Biological materials such as sugarcane bagasse (SB) have been reported for their role as adsorbents to remove the dyes from water. In this study, the residue SB after fermentation was utilized for the dye removal. A combined pretreatment of NaOH and methyltrioctylammonium chloride was given to SB for lignin removal, and the pretreated SB was utilized for cellulase production from Bacillus aestuarii UE25. The strain produced 118 IU mL−1 of endoglucanse and 70 IU mL−1 of β-glucosidase. Scanning electron microscopy and FTIR spectra showed lignin and cellulose removal in fermented SB. This residue was utilized for the adsorption of an azo dye, congo red (CR). The thermodynamic, isotherm and kinetics studies for the adsorption of CR revealed distinct adsorption features of SB. Untreated SB followed Langmuir isotherm, whereas pretreated SB and fermented SB obeyed the Freundlich isotherm model. The pseudo-second-order model fitted well for the studied adsorbents. The results of thermodynamic studies revealed spontaneous adsorption with negative standard free energy values. Untreated SB showed a 90.36% removal tendency at 303.15 K temperature, whereas the adsorbents comprised of pretreated and fermented SB removed about 98.35% and 97.70%, respectively. The study provided a strategy to utilize SB for cellulase production and its use as an adsorbent for toxic dyes removal.