Paddy straw, an abundant lignocellulosic agricultural residue, has garnered significant attention as a sustainable feedstock for biofuel production. Traditional disposal methods, such as open burning and field incorporation, contribute to environmental degradation, including air pollution and greenhouse gas emissions. This review comprehensively examines the recent advancements in converting paddy straw into various biofuels—namely bioethanol, biogas, and biodiesel. Emphasis is placed on technological innovations in pretreatment methods, conversion processes, and integrated biorefinery approaches over the past decade. The findings highlight the evolution of methodologies that enhance efficiency and sustainability, offering insights into future prospects for utilizing paddy straw as a versatile biofuel resource.