The complete valorization of lignocellulosic biomass (LCB) to valuable bio-products with one-step fractionation is still challenging. This study represents sustainable waste-free biorefinery routes for efficient fractionation of LCB, employing a novel pretreatment method using hydrotropic p–toluenesulfonic acid (TsOH) mixed with pentanol. The potential of LCB pretreatment using TsOH/pentanol reagent as lignin absorbent with co-production of bioethanol and xylonic acid was investigated. Biomass pretreatment at 120 °C for 40 min with 20% TsOH dosage was the optimal condition that significantly dissolved more than 88.2% of lignin and 95.1% of hemicellulose in the biphasic phase, while 95.6% of cellulose was retained in the solid phase. Further fermentation of cellulose-rich fraction using Saccharomyces cerevisiae resulted in 225 g kg−1 bioethanol yield. In addition, xylose-rich phase was converted into xylonic acid by Gluconobacter oxydans fermentation with a yield of 202 g kg−1. Importantly, the isolated lignin was altered by acid groups during sulphonation through TsOH/pentanol pretreatment, which makes lignin a potential adsorbent for cationic contaminants in wastewater. In particular, the isolated lignin achieved high adsorption capacity (300 mg/g) of methylene blue. The proposed biorefinery routes showed a high net positive energy of 3.65 MJ kg−1 dry biomass with an energy ratio of 1.70. Therefore, this study provides an innovative synergistic pretreatment using TsOH/pentanol as a promising fractionation process for efficient cascade valorization of LCB into valuable bio-products.