Alcohol-based liquid fuels feature significantly in the political and social agendas of many countries, seeking energy sustainability. It is certain that ethanol will be the entry point for many sustainable processes. Conventional ethanol production using maize- and sugarcane-based carbohydrates with Saccharomyces cerevisiae is well established, while lignocellulose-based processes are receiving growing interest despite posing greater technical and scientific challenges. A significant challenge that arises from the chemical hydrolysis of lignocellulose is the generation of toxic compounds in parallel with the release of sugars. These compounds, collectively termed pre-treatment inhibitors, impair metabolic functionality and growth. Their removal, pre-fermentation or their abatement, via milder hydrolysis, are currently uneconomic options. It is widely acknowledged that a more cost effective strategy is to develop resistant process strains. Here we describe and classify common inhibitors and describe in detail the reported physiological responses that occur in second-generation strains, which include engineered yeast and mesophilic and thermophilic prokaryotes. It is suggested that a thorough understanding of tolerance to common pre-treatment inhibitors should be a major focus in ongoing strain engineering. This review is a useful resource for future metabolic engineering strategies.