The pretreatment of lignocellulosic biomass enhances the conversion efficiency to produce biofuels and value-added chemicals, which have the potential to replace fossil fuels. Compared to physicochemical and other pretreatment techniques, the hydrothermal methods are considered eco-friendly and cost-effective. This paper reviews the strengths, weaknesses, opportunities and threats of steam explosion and subcritical water hydrolysis as the two promising hydrothermal technologies for the pretreatment of lignocellulosic biomass. Although the principle of the steam explosion in depolymerizing the lignin and exposing the cellulose fibers for bioconversion to liquid fuels is well known, its underlying mechanism for solid biofuel production is less identified. Therefore, this review provides an insight into different operating conditions of steam explosion and subcritical water hydrolysis for a wide variety of feedstocks. The mechanisms of subcritical water hydrolysis including dehydration, decarboxylation and carbonization of waste biomass are comprehensively described. Finally, the role of microwave heating in the hydrothermal pretreatment of biomass is elucidated.