Lignocellulosic biomass is an abundant, renewable feedstock for the production of fuels and chemicals, if an efficient and affordable conversion technology can be established to overcome its recalcitrance. Consolidated bioprocessing (CBP) featuring enzyme production, substrate hydrolysis and fermentation in a single step is a biologically mediated conversion approach with outstanding potential if a fit-for-purpose microorganism(s) can be developed. Progress in developing CBP-enabling microorganisms is ongoing by engineering (i) naturally cellulolytic microorganisms for improved product-related properties or (ii) non-cellulolytic organisms exhibiting high product yields to heterologously produce different combinations of cellulase enzymes. We discuss progress on developing yeast and bacteria for the latter strategy and consider further challenges that require attention to bring this technology to market.