Lignocellulosic fractionation is highly desirable for the efficient transformation of polymeric sugars into renewable fuels, chemicals, and materials. Thus, γ-valerolactone (GVL) has attracted attention as an advanced platform chemical, which can be synthesized directly from bioderived products, such as levulinic acid, furfural, and hydroxymethylfurfural, as well as via one-pot catalytic transformation of renewable sugars (cellulose, hemicellulose, and fructose). GVL, when combined with acid and water in a certain ratio, has unique solvent characteristics to deconstruct biomass and solubilize lignin and xylose with reduced toxin generation. GVL is suitable for downstream processing, and thus, it promotes a self-sustainable, closed-loop biorefinery approach. Therefore, in this review, we comprehensively summarized the recent updates and catalytic approaches for GVL production, as well as their applications in biomass deconstruction. Additionally, we introduced the research topic, biomass structure, and natural recalcitrance, and described the merits and demerits of conventional pretreatment methods adopted in the literature so far. Finally, we discussed advancements in GVL-based biorefinery, challenges, and future perspectives.