Replacing fossil fuels with renewable biofuels derived from lignocellulosic biomass is an important aspect of addressing environmental challenges and developing a sustainable industrial society. Densification overcomes the problems of low bulk density and poor flowability of biomass and has been commercialized for producing solid biofuels, but the overall impact of densification on biological-based biorefineries that primarily target liquid fuels (e.g., ethanol) is still under investigation. This review provides a thorough summary of the application of densified biomass in biological-based biorefineries. First, the effects of densification parameters as well as variables of biomass materials on the densified products’ quality are reviewed, and different commonly used densification technologies are also discussed and compared. Then, the discussion focuses on the physiochemical modifications of biomass caused by densification that may influence further pretreatment and/or enzymatic hydrolysis in biorefineries. Industrial pelleting has been generally shown to exhibit positive/neutral effects on the enzymatic hydrolysis of multiple biomass feedstocks after pretreatments, indicating the viability of using pellets as starting feedstocks in biorefineries. Densification causes structural disruption of biomass, which may facilitate further biochemical conversions. Integrating biomass densification in the feedstock supply chain is feasible for large-scale biorefineries to overcome the techno-economic barriers and become profitable. Suggestions are presented for the efficiency enhancement and cost reduction in densification-based biorefineries. To enable wider applications, it is now the time to employ more demo and full-scale activities in different regions of the world pushing the research and innovation of densification integrated within biorefining.