Biologically mediated processes seem promising for energy conversion, in particular for the conversion of lignocellulosic biomass into fuels. Although processes featuring a step dedicated to the production of cellulase enzymes have been the focus of most research efforts to date, consolidated bioprocessing (CBP)--featuring cellulase production, cellulose hydrolysis and fermentation in one step--is an alternative approach with outstanding potential. Progress in developing CBP-enabling microorganisms is being made through two strategies: engineering naturally occurring cellulolytic microorganisms to improve product-related properties, such as yield and titer, and engineering non-cellulolytic organisms that exhibit high product yields and titers to express a heterologous cellulase system enabling cellulose utilization. Recent studies of the fundamental principles of microbial cellulose utilization support the feasibility of CBP.