Lignocellulosic biomass, comprising of cellulose, hemicellulose, and lignin, is a difficult-to-degrade substrate when subjected to anaerobic digestion. Hydrothermal pretreatment of lignocellulosic biomass could enhance the process performance by increasing the generation of methane, hydrogen, and bioethanol. The recalcitrants (furfurals, and 5-HMF) could be formed at high temperatures during hydrothermal pretreatment of lignocellulosic biomass, which may hinder the process performance. However, the detoxification process involving the use of genetically engineered microbes may be a promising option to reduce the toxic effects of inhibitors. The key challenge lies in the scaleup of the hydrothermal process, mainly due to necessity of upholding high temperature in sizeable reactors, which may demand high capital and operational costs. Thus, more efforts should be towards the techno-economic feasibility of hydrothermal pre-treatment at full scale.