The global energy crisis and limited supply of petroleum fuels have rekindled the interest in utilizing a sustainable biomass to produce biofuel. Butanol, an advanced biofuel, is a superior renewable resource as it has a high energy content and is less hygroscopic than other candidates. At present, the biobutanol route, employing acetone-butanolethanol (ABE) fermentation in Clostridium species, is not economically competitive due to the high cost of feedstocks, low butanol titer, and product inhibition. Based on an analysis of the physiological characteristics of solventogenic clostridia, current advances that enhance ABE fermentation from strain improvement to product separation were systematically reviewed, focusing on: (1) elucidating the metabolic pathway and regulation mechanism of butanol synthesis; (2) enhancing cellular performance and robustness through metabolic engineering, and (3) optimizing the process of ABE fermentation. Finally, perspectives on engineering and exploiting clostridia as cell factories to efficiently produce various chemicals and materials are also discussed.