New biobased processes and products are emerging to replace conventional ones in the search for sustainable development. Xylitol is one of the most commercially valuable products from xylan-rich lignocellulosic biomass. Xylitol has multiple applications in the pharmaceutical, food, nutraceutical, and beverage industries. Recent research focuses on obtaining xylose from low-cost lignocellulosic materials through the biological route, optimizing xylitol conversion, improving byproduct removal, and increasing crystallization speed. The biological route can be an environmentally friendly alternative due to the possibility of lower energy demand and utilizing renewable feedstocks which are key factors to reach sustainability. Several integration strategies are being evaluated and are critical to developing a commercial platform. Process integration can considerably reduce the demand for energy and reagents. Also, the value-added products produced alongside xylitol are crucial, and these products are usually energy generation and bioethanol. Further, new value-added products show promising results and are relevant to improving the economic performance of the processes. The market trends of xylitol are expected to reach close to USD 1.5 billion in 2030. In addition, the improvement needed in the conversion steps and obtained yields, producing commercial-scale xylitol through the biological route, is a promising alternative to finding a more sustainable way to produce xylitol.