Butanol is an aliphatic saturated alcohol having the molecular formula of C4H9OH. Butanol can be used as an intermediate in chemical synthesis and as a solvent for a wide variety of chemical and textile industry applications. Moreover, butanol has been considered as a potential fuel or fuel additive. Biological production of butanol (with acetone and ethanol) was one of the largest industrial fermentation processes early in the 20th century. However, fermentive production of butanol had lost its competitiveness by 1960s due to increasing substrate costs and the advent of more efficient petrochemical processes. Recently, increasing demand for the use of renewable resources as feedstock for the production of chemicals combined with advances in biotechnology through omics, systems biology, metabolic engineering and innovative process developments is generating a renewed interest in fermentative butanol production. This article reviews biotechnological production of butanol by clostridia and some relevant fermentation and down stream processes. The strategies for strain improvement by metabolic engineering and further requirements to make fermentative butanol production a successful industrial process are also discussed.