Butanol is a key microbial product that provides a route from renewable carbohydrate resources to a "drop-in" liquid biofuel, broadening its market in the near future. The acceptable performance of butanol as a neat or a blended fuel in different engines both from the technical and environmental points of view has attracted a wide range of research for reviving the old acetone-butanol-ethanol (ABE) fermentation. In this review, recent findings on fuel characteristics of butanol, different generations of substrate for large scale butanol production, and alternative process designs for upstream, mainstream, and downstream operations have been critically reviewed and discussed. In the upstream, studies devoted to designing and optimization of pretreatments based on prerequisites of butanol production, e.g., maximizing cellulose and hemicellulose recovery and minimizing lignin degradation, are presented. In the mainstream, different microbial systems and process integrations developed for facilitating ABE production (e.g., in-situ butanol removal) are scrutinized. Finally, innovations in ABE recovery and purification as "Achilles Heel" of butanol production processes which directly controls the energy return on investment (EROI), are reviewed and discussed.