Lignocellulosic biomass is a most promising feedstock in the production of second-generation biofuels. Efficient degradation of lignocellulosic biomass requires a synergistic action of several cellulases and hemicellulases. Cellulases depolymerize cellulose, the main polymer of the lignocellulosic biomass, to its building blocks. The production of cellulase cocktails has been widely explored, however, there are still some main challenges that enzymes need to overcome in order to develop a sustainable production of bioethanol. The main challenges include low activity, product inhibition, and the need to perform fine-tuning of a cellulase cocktail for each type of biomass. Protein engineering and directed evolution are powerful technologies to improve enzyme properties such as increased activity, decreased product inhibition, increased thermal stability, improved performance in non-conventional media, and pH stability, which will lead to a production of more efficient cocktails. In this review, we focus on recent advances in cellulase cocktail production, its current challenges, protein engineering as an efficient strategy to engineer cellulases, and our view on future prospects in the generation of tailored cellulases for biofuel production.