Global demand for renewable and sustainable energy fostered the considerable development of biomass-to-ethanol valorization strategies. Thermochemical pretreatment methods have been proposed to render biomass more amenable to enzymatic and microbial digestion. However, the efforts have not led to its industrial-scale worldwide realization. One of the obstacles to commercialization could be related to water overconsumption, as excessive water washing of the pretreated slurry is often performed to remove inhibitory compounds and residual chemicals after biomass pretreatment. Only increasing solid loading for biomass pretreatment results in ineffective pretreatment performance, more inhibitors formation, and high viscosity, which in turn necessitates the water washing step. A number of physicochemical and biological methods are applied to detoxify the acid-pretreated liquid fraction for enzymatic hydrolysis and fermentation. Among them, alkaline neutralization and liquid–liquid extraction are preferred because of their simple operation and low cost. Seemingly, recycling black liquor for alkali pretreatment offers a pathway to reduce water and chemical consumption, but alkali replenishment and inhibitor accumulation significantly weaken this technology. Interestingly, quite a few studies have removed the water washing and even solid–liquid separation steps after (liquid hot water, Tween 40, and CaO) pretreatment. There is still much room for future studies to render biomass pretreatment more feasible in terms of economic and environmental points of view. This review provides a deep understanding of wastewater generation during biomass upgrading and discusses the solutions to reduce water consumption critically.