<p>Second-generation bioethanol, derived from lignocellulosic biomass, offers a promising renewable energy option for expanding global population. However, there are various challenges and drawbacks in this process which limit the potential of second-generation bioethanol in energy sector. These challenges include the generation of inhibitory compounds during the biomass pretreatment, and the restricted conversion of pentose sugars. Detoxification, neutralization, desalination, and a number of other procedures are among the many technological initiatives and interventions that have been made in an attempt to address and resolve these challenges. Nevertheless, these interventions come with a high net production cost rendering second-generation bioethanol economically unfeasible. The development of new strains offers a workable answer to a good portion of these problems that are associated with second-generation bioethanol. This review delves into the advancements in strain development through genetic engineering, mutagenesis, and adaptive evolution, both individually and in combination, and its potential to provide a breakthrough in the economic feasibility of second-generation bioethanol. Specifically, we focus on how these processes can be used to create strains that are more resistant to the effects of environmental stressors and have higher substrate utilization. Briefly, we also discuss about the future prospect of the strain development for second-generation bioethanol production.</p> Graphical Abstract <p></p>