The potential for widespread use of domestically available energy resources, in conjunction with climate change concerns, suggest that biomass may be an essential component of U.S. energy systems in the near future. Cellulosic biomass in particular is anticipated to be used in increasing quantities because of policy efforts, such as federal renewable fuel standards and state renewable portfolio standards. Unfortunately, these independently designed biomass policies do not account for the fact that cellulosic biomass can equally be used for different, competing energy demands. An integrated assessment of multiple feedstocks, energy demands, and system costs is critical for making optimal decisions about a unified biomass energy strategy. This study develops a spatially explicit, best-use framework to optimally allocate cellulosic biomass feedstocks to energy demands in transportation, electricity, and residential heating sectors, while minimizing total system costs and tracking greenhouse gas emissions. Comparing biomass usage across three climate policy scenarios suggests that biomass used for space heating is a low cost emissions reduction option, while biomass for liquid fuel or for electricity becomes attractive only as emissions reduction targets or carbon prices increase. Regardless of the policy approach, study results make a strong case for national and regional coordination in policy design and compliance pathways.