Non-productive adsorption of cellulose degrading enzymes on lignin is a likely reason for reduced rate and extent of enzymatic conversion of lignocellulosic substrate to sugars. Additives such as polyethyleneglycol (PEG) may act as blocking agents in this non-productive interaction. However, the exact molecular level interactions of PEG with lignin in pre-treated lignocellulosic substrates are not known. We have used confocal fluorescence microscopy combined with Förster resonance energy transfer (FRET) to reveal molecular level interactions between lignin present in thermo-mechanically pre-treated Pinus radiata substrate, and fluorescently labeled PEG. It is demonstrated that PEG interaction with lignin is mainly associated with particles derived from secondary walls, with little or no penetration into fragments derived from the middle lamella. This nanoscale information on the PEG–substrate interaction will assist in rationalizing pre-treatment methods to reduce the recalcitrance of softwood biofuel substrates. Biotechnol. Biotechnol. Bioeng. 2014;111: 719–725. © 2013 Wiley Periodicals, Inc.