Alkaline hydrogen peroxide treatment has effected on physical and chemical properties of rice straw. Alkaline hydrogen peroxide treatment can improve all physical properties of rice straw. Treatment times of 10 h provided maximum values for water holding capacity, swollen volume and oil binding capacity of rice straw. Cellulose as a percentage of dried weight of treated product reached maximum values after 6 h. Lignin removal increased with treatment time by 50% after the reaction treatment of 8 h. As the 5% of alkaline hydrogen peroxide treated rice straw (AHP-RS) substitution in bread, reductions of loaf volume and softness of bread was observed and directly opposite with particle size reduction. Breads containing 5% of AHP-RS indicated the most acceptability when the particle size of AHP-RS was <0.075 mm.