Fermentation of liquid hot water (LHW) pretreated Miscanthus giganteus (MG) by Clostridium beijerinckii NCIMB 8052 was investigated towards understanding the toxicity of lignocellulose-derived inhibitors to solventogenic Clostridium species vis-à-vis butanol production. While C. beijerinckii NCIMB 8052 did not grow in undiluted MG hydrolysate-based fermentation medium, supplementation of this medium with Calcium carbonate enabled the growth of C. beijerinckii NCIMB 8052 and production of butanol. Using high-performance liquid chromatography (HPLC) and spectrophotometric assays, LHW-pretreated MG was found to contain lignocellulose-derived microbial inhibitory compounds; some of which were transformed by exponentially growing C. beijerinckii to less inhibitory compounds during fermentation. Contrary to all expectations, the reduction product of furfural, furfuryl alcohol, inhibited butanol production by C. beijerinckii by more than 16 %. Collectively, these results provide new insights into why lignocellulosic biomass hydrolysates are recalcitrant to fermentation to biofuels and chemicals.