A series of process design and economics models have been created which calculate the process cost for several scenarios in steam-explosion/fractionation of wood. Steam-explosion/fractionation technology offers the opportunity to produce chemicals and materials from such biomass resources as wood processing residues, agricultural crop residues and waste paper. The models comprise a series of modular computer simulations, where each module summarizes a particular group of unit operations with respect to mass balance, energy requirements, and process cost including utilities, capital, labor, and other related costs. These modules are compiled into three groups of scenarios: (1) unprocessed steam-exploded biomass, (2) water extracted steam-exploded biomass, and (3) water and aqueous solvent (alkali or ethanol) extracted steam-exploded biomass. For the base case evaluated, the cost of producing a 50% moisture content (based on total weight) steam-exploded fiber amounts to the raw material cost plus $0.077 kg(-1), dry basis. A water washed steam-exploded biomass fiber along with water-soluble solids (WSS) can be produced for $0.165 kg(-1), plus raw material, if the WSS are recovered by evaporative concentration. A more delignified, steam-exploded fiber with recovery of WSS and an aqueous alkali soluble lignin can be produced for between $0.222 and $0.246 kg(-1) of raw material processed, dry basis, depending on the lignin recovery option employed (i.e. evaporative concentration; precipitation from alkaline solution; or spray drying).