Biobutanol is a promising biofuel due to the close resemblance of its fuel properties to gasoline, and it is produced via acetone-butanol-ethanol (ABE) fermentation using Clostridium species. However, lignin in the crystalline structure of the lignin-cellulose-hemicellulose biomass complex is not readily consumed by the Clostridium; thus, pretreatment is required to degrade this complex. During pretreatment, some fractions of cellulose and hemicellulose are converted into fermentable sugars, which are further converted to ABE. However, a major setback resulting from common pretreatment processes is the formation of sugar and lignin degradation compounds, including weak acids, furan derivatives, and phenolic compounds, which have inhibitory effects on the Clostridium. In addition, butanol concentration above 13 g/L in the fermentation broth is itself toxic to most Clostridium strain(s). This review summarizes the current state-of-the-art knowledge on the formation of microbial inhibitors during the most common lignocellulosic biomass pretreatment processes. Metabolic effects of inhibitors and their impacts on ABE production, as well as potential solutions for reducing inhibitor formation, such as optimizing pretreatment process parameters, using inhibitor tolerant strain(s) with high butanol yield ability, continuously recovering butanol during ABE fermentation, and adopting consolidated bioprocessing, are also discussed.