Biobutanol has demonstrated to be a superior alternative biofuel in internal combustion engine (ICEs). Acetonebutanol-ethanol (ABE) fermentation engineering is a typical technique for biobutanol production. However, the high costs and extra energy consumption in recovery process of biobutanol from intermediate fermentation solvent (i.e. ABE mixture) has obstructed its large-scale application. It is gaining increasing attention to investigate ABE as a potential alternative biofuel. ABE production and ABE combustion in ICEs have been widely studied, but these studies are rarely reviewed to favor understanding and popularization for ABE so far. In this work, the updated progress of ABE fermentation techniques is first summarized from the aspects: (i) selection of suitable strain; (ii) availability of cheaper substrates; (iii) development of fermentation engineering. Then, the research on ABE combustion in ICEs are concluded from the aspects: (i) physicochemical properties and tests in ICEs of ABE components; (ii) substitute for diesel in compression ignition engines; (iii) substitute for gasoline in spark ignition engines. These studies demonstrate that ABE is a better alternative for gasoline or diesel fuel due to the environmentally benign manufacturing process and the potential to improve energy efficiency and reduce pollutant emissions. However, ABE has not been intensively studied when compared to conventional alternative fuels (e.g. ethanol, butanol, biodiesel, etc.), for which considerable numbers of reports are available. Therefore, some challenges and future research directions are outlined in the end. This review is helpful for finding opportunities to make ABE as a feasible alternative biofuel in near future.