Hemicellulose is a heteropolysaccharide fraction in lignocellulosic biomass (LB) constituting ~30% of the total cell wall fraction, the second most abundant carbohydrate in nature. Therefore, bioconversion of hemicellulose into second-generation (2G) ethanol or biochemicals is essential, in order to unleash the fullest potential of LB under the biorefinery concept. Research efforts made in hemicellulose valorization at a laboratory scale can have large impacts when rolled out on a commercial scale. This is evidenced from the research in last 2-3 decades at every front of hemicellulose bioconversion, be it process engineering or synthetic biology, to develop designer microorganisms. Hemicellulosic sugars can also serve as principle building blocks for the sustainable production of 2G ethanol or renewable chemicals. Unlike the bioconversion of cellulose into fuels or chemicals, hemicellulose conversion with desired yields and productivities is still a challenge, as hemicellulosic hydrolyzate is composed mainly of 5-carbon sugars (xylose, arabinose) and some undesired compounds which are released from the hemicellulose structure. However, for the realization of the success of biorefineries, the bioconversion of hemicellulose is inevitable. This chapter discusses the process for hemicellulose sugar recovery via pretreatment and enzymatic hydrolysis, progress, and prospects for developing a sustainable bioprocess for ethanol, xylitol, polymers, and other products utilizing hemicellulosic sugars. Also, recent advances in the development of biocatalysts for hemicellulose sugar conversion, fermentation process modification strategies, and the commercial outlook for bioproducts from hemicellulose are highlighted.