Bioethanol is recognized as an important renewable and sustainable transportation fuel. Although synthesis gas (syngas: CO, H2, CO2) produced from lignocellulosic biomass (forest or agricultural biomass) is being used in the production of bioethanol by both chemical catalytic and biosynthetic processes, the latter are noted to have more advantages. In the biosynthesis process, such as the fermentation of syngas, bioethanol is produced along with acetate, butanol, butyrate, methane, peptone, and formaldehyde. Although progress has been made on research and development for the utilization of syngas on fermentation technology, the major barriers for the commercialization still include low yield, expensive biological catalyst, slow kinetics, low gas–liquid mass transfer, and challenges with catalytic separation and recycling. This paper presents a review on fermentation product impurities, microorganisms, chemical reactions, separation techniques, bioreactor types, fermentation conditions, gas–liquid mass transfer, current status of the technology and economics. It seems selection of the appropriate microorganism, nutrient medium, and appropriate hollow fiber membrane biofilm reactor might lead toward achieving an increased mass transfer efficiency for commercialization of the bioethanol.