The circular bioeconomy uses lignocellulosic biomass (LCB) as a renewable feedstock to meet rising global energy demand and reduce fossil fuel emissions. The valorization of LCB, primarily cellulose, hemicellulose, and lignin, presents challenges due to its recalcitrant composition, necessitating pretreatment techniques. Oligosaccharides can be generated from partially degrading polysaccharides like cellulose and hemicellulose, and their selective recovery has drawn attention due to their commercial value and industrial importance. Enzymatic hydrolysis is ideal for this application due to its moderate conditions, excellent selectivity, and low byproduct generation. This chapter discusses several pretreatment methods, like physical, chemical, physicochemical, and biological treatments, that are used to break down LCB and make it more accessible for downstream processing. The chapter focuses on using the enzymatic hydrolysis of pretreated biomass to extract functional oligosaccharides (FOS), emphasizing the advantages of enzymatic methods over conventional techniques in terms of selectivity, efficiency, and mild conditions. This chapter discusses the processes of major enzymes (e.g., cellulases, hemicellulases, pectinases, amylases, inulinases) in the synthesis of xylo-, cello-, and fructooligosaccharides. The effects of temperature, pH, residence time, catalyst concentration, and solid-to-liquid ratio on pretreatment efficacy are explored. Consolidated bioprocessing (CBP) and simultaneous saccharification and fermentation (SSF) are discussed in the chapter to increase sugar yields and production efficiency. Recovered oligosaccharides are economically important since they are utilized in food, medicines, cosmetics, animal feed, agrochemicals, etc. The chapter concludes with biomass valorization’s economic and environmental impacts in a sustainable bioeconomy.