Fossil fuel consumption contributes to harmful environmental impacts, necessitating exploring alternative renewable energy sources. Biofuels, derived from lignocellulosic (LC) material, provide a promising alternative to reduce the dependence on fossil oils. This paper emphasizes the significance of biofuels and the methods used in their production. It also highlights different techniques used to produce biofuels from biomass. Thermochemical and biochemical processes have been used to transform biomass into biofuels. A review of the latest developments in hybrid approaches that integrated both thermochemical and biochemical have been revised. The significance of biofuels, their manufacturing procedures, and the various methods for converting biomass into biofuels have been highlighted in this review. The study raised important issues about biomass conversion techniques, enzyme recovery, enzymatic optimization methods, and the necessity of ongoing research and development. The current challenges and future perspectives on various strategies in the production of biofuel were discussed. Moreover, the sustainability of these approaches has been assessed by looking at the environmental impact evaluation of LC biofuel production. The review on thermochemical, biochemical, and hybrid conversion technology advancements might reveal novel strategies and suggest additional study and development directions.