The gradual shift of transportation fuels from oil based fuels to the alternative fuel resources and worldwide demand for energy has been the impetus for research to produce alcohol biofuels from renewable resources. Current bioethanol and biodiesel can, however, not cover an increasing demand for biofuels. Hence, there is an extensive need for advanced biofuels with superior fuel properties. The present review is focused on the developments of biobutanol, which is regarded to be superior to bioethanol in terms of energy density and hygroscopicity. Although acetone-butanolethanol (ABE) fermentation is one of the oldest large-scale fermentation processes, butanol yield by anaerobic fermentation remains sub-optimal. For sustainable industrial scale butanol production, a number of obstacles need to be addressed including choice of feedstock, low product yield, product toxicity to production strain, multiple end-products and downstream processing of alcohol mixtures.Metabolic engineering provides a means for fermentation improvements. Different strategies are employed in the metabolic engineering of Clostridia that aim to enhance the solvent production, improve selectivity for butanol production, and increase the tolerance of Clostridia to solvents. The introduction and expression of a non-clostridial butanol producing pathway in E. coli is most promising strategy for butanol biosynthesis. Several rigorous kinetic and physiological models for fermentation have been formulated, which form useful tool for optimization of the process. Due to the lower butanol titers in the fermentation broth, simultaneous fermentation and product removal techniques have been developed to improve production economics. With the use of new strains, inexpensive substrates, and superior reactor designs, economic ABE fermentation may further attract an attention of researchers all over the world. The present review is attempting to provide an overall outlook on discoveries and strategies that are being developed for commercial n-butanol production.