Furfural (FF) and 5-hydroxymethylfurfural (HMF) are furan derivatives commonly generated during the pretreatment of lignocellulosic biomass and often considered among the most inhibitory compounds towards the sugar fermenting strains due to their acute toxicity and high concentrations. The present study describes the simultaneous detoxification and fermentation of lignocellulosic hydrolysates containing high concentrations of FF and HMF by a co-culture of a novel Fusarium striatum strain and a xylose consuming Saccharomyces cerevisiae strain. The process demonstrates a superior performance than those previously described in the literature, as FF and HMF were efficiently transformed into their less toxic added-value alcohol derivatives by F. striatum with high yields (99% and 86%, respectively) and the higher detoxification rates reported (0.56 g/L/h and 0.13 g/L/h, respectively). There was no sugar consumption by the filamentous fungus during the detoxification process, rendering it available for ethanol fermentation by S. cerevisiae, which started immediately after the detoxification of the inhibitors. Ethanol productivities were significantly higher when increasing the inoculum size of F. striatum, confirming its potential for the detoxification of the lignocellulosic hydrolysate. High ethanol yields (0.4 g/g) and productivities (0.46 g/L/h) were obtained in a bench-scale bioreactor (1.5 L) in the presence of 3.5 g/L HMF and 2.5 g/L FF, a concentration of furan derivatives that completely inhibited the fermentation process in the absence of F. striatum. The presented process allows access to lignocellulosic materials and pretreatment methods that result in high concentrations of FF and HMF that are currently not feasible, representing a significant advance for the lignocellulosic ethanol industry.