The present work evaluates a two-step pretreatment process based on steam explosion and extrusion technologies for the optimal fractionation of lignocellulosic biomass. Two-step pretreatment of barley straw resulted in overall glucan, hemicellulose and lignin recovery yields of 84%, 91% and 87%, respectively. Precipitation of the collected lignin-rich liquid fraction yielded a solid residue with high lignin content, offering possibilities for subsequent applications. Moreover, hydrolysability tests showed almost complete saccharification of the pretreated solid residue, which when combined with the low concentration of the generated inhibitory compounds, is representative of a good pretreatment approach. Scheffersomyces stipitis was capable of fermenting all of the glucose and xylose from the non-diluted hemicellulose fraction, resulting in an ethanol concentration of 17.5 g/L with 0.34 g/g yields. Similarly, Saccharomyces cerevisiae produced about 4% (v/v) ethanol concentration with 0.40 g/g yields, during simultaneous saccharification and fermentation (SSF) of the two-step pretreated solid residue at 10% (w/w) consistency. These results increased the overall conversion yields from a one-step steam explosion pretreatment by 1.4-fold, showing the effectiveness of including an extrusion step to enhance overall biomass fractionation and carbohydrates conversion via microbial fermentation processes.