A biorefinery strategy for the coproduction of ethanol and 1,5-pentanediol (1,5-PDO), which can be used as polyester and polyurethane component, from lignocellulosic biomass is proposed. This strategy integrates biomass fractionation with simultaneous conversion of hemicellulose and cellulose constituents into 1,5-PDO and ethanol, respectively. An experimentally-based process model is developed to determine the economic potential of the integrated strategy. The coproduction strategy becomes competitive with the ethanol-only strategy when 1,5-PDO can be sold at $1140/ton, which is well below the market price of 1,5-PDO. The most important process parameters include biomass loading for biomass fractionation, enzyme loading for enzymatic hydrolysis and fermentation, and overall achievable yields from C5 sugars to 1,5-PDO.