Consolidated bioprocessing, or CBP, the conversion of lignocellulose into desired products in one step without added enzymes, has been a subject of increased research effort in recent years. In this review, the economic motivation for CBP is addressed, advances and remaining obstacles for CBP organism development are reviewed, and we comment briefly on fundamental aspects. For CBP organism development beginning with microbes that have native ability to utilize insoluble components of cellulosic biomass, key recent advances include the development of genetic systems for several cellulolytic bacteria, engineering a thermophilic bacterium to produce ethanol at commercially attractive yields and titers, and engineering a cellulolytic microbe to produce butanol. For CBP organism development, beginning with microbes that do not have this ability and thus requiring heterologous expression of a saccharolytic enzyme system, high-yield conversion of model cellulosic substrates and heterologous expression of CBH1 and CBH2 in yeast at levels believed to be sufficient for an industrial process have recently been demonstrated. For both strategies, increased emphasis on realizing high performance under industrial conditions is needed. Continued exploration of the underlying fundamentals of microbial cellulose utilization is likely to be useful in order to guide the choice and development of CBP systems.