Lignocellulosic biomass from agro-residues, biomass waste, and energy crops is the most abundant renewable carbon resource worldwide. The complex mix of cellulose, hemicellulose, and lignin creates technical and economic challenges for commercial bioethanol production. Recent studies highlight eco-friendly, solvent-based, and integrated pretreatment strategies, such as deep eutectic solvents, to boost fermentable sugar yields and reduce inhibitor formation. Advances in physical pretreatment methods like steam explosion and hydrothermal carbonization, along with improved enzyme systems and microbial strain engineering, have further increased process sustainability and efficiency. Innovative process setups, including simultaneous saccharification and fermentation (SSF) and consolidated bioprocessing CB), help lower operational costs and raise yields. Progress in enzyme technology and the integration of advanced pretreatment methods are improving prospects for large-scale production, though challenges with enzyme costs, inhibitor control, and scalability remain. Addressing these barriers is key to fully realizing the potential of lignocellulosic bioethanol. Together, these advances support the transition to a circular, low-carbon bioeconomy and establish lignocellulosic bioethanol as a significant renewable energy source.