Products containing the perennial grain intermediate wheatgrass (IWG) have recently entered the market, but little is known about the effect of processing operations on its constituents. This study investigated the effect of steam explosion (SE) conditions, i.e., temperature (130, 150 or 170 °C) and residence time (5 or 10 min), spanning severity factors from 1.6 to 3.1, on physicochemical properties of IWG bran. Even the lowest temperature and shortest time combination (130 °C, 5 min), was sufficient to inactivate peroxidase, generally regarded as the most heat-stable enzyme in grains. Contents of free phenolic acids as well as water-extractable arabinoxylans significantly increased while phytic acid was reduced after SE. However, starch damage, free fatty acids as well as browning (all negatively affecting quality) increased with treatment severity. Thus, SE is a promising technology to reduce enzymatic activity, enhance phenolic and soluble fiber contents in IWG bran, but severity factors >2.5 may negatively affect quality.