The invention relates to a method for producing fuel ethanol and by-product rice DDGS by using rice as a raw material. The method comprises the following steps: (1) rice smashing preprocessing; (2) preparing liquefied mash; (3) preparing wine mash; (4) preparing fermented mature mash; (5) preparing fuel ethanol; (6) preparing rice DDGS. The product fuel ethanol obtained from the method has high volume fraction of ethanol, and the quality conforms to the national standard GB 18350-2013 Denatured Fuel Ethanol. In addition, a detection result of mycotoxin in the by-product rice DDGS is lower thanthe limit standard, and the protein content is high. Therefore, the industrial production of the rice processed fuel ethanol and the by-product rice DDGS is achieved, the risk that the harmful mycotoxin enters a food chain system is avoided and causes the mycotoxin exceeding the standard in the DDGS is avoided, the protein content in the DDGS is increased, and the comprehensive utilization valueof the rice is greatly improved.