Conventional coffee brewing techniques generate vast quantities of spent espresso grounds (SEGs) rich in lignocellulose and valuable bioactives. These bioactive compounds can be exploited as a nutraceutical or used in a range of food products, while breakdown of lignocellulose generates metabolizable sugars that can be used for the production of various high-value products such as biofuels, amino acids and enzymes. Response surface methodology (RSM) was used to optimize the enzymatic saccharification of lignocellulose in SEGs following a hydrothermal pretreatment. A maximum reducing sugar yield was obtained at the following optimized hydrolysis conditions: 4.97 g of pretreated SEGs, 120 h reaction time, and 1246 and 250 µL of cellulase and hemicellulase, respectively. Industrially important sugars (glucose, galactose and mannose) were identified as the principal hydrolysis products under the studied conditions. Total flavonoids (p = 0.0002), total polyphenols (p = 0.03) and DPPH free-radical scavenging activity (p = 0.004) increased significantly after processing. A 14-fold increase in caffeine levels was also observed. This study provides insight into SEGs as a promising source of industrially important sugars and polyphenols.