Pseudo-lignin, which can be broadly defined as aromatic material that yields a positive acid-insoluble (Klason) lignin value, has been reported to generate from biomass polysaccharides during dilute acid pretreatment (DAP). To investigate the fundamental chemistry of pseudo-lignin, a series of state-to-art analytical techniques including GPC, FT-IR and ¹³C NMR were applied to characterize pseudo-lignin extracted from poplar α-cellulose and holocellulose after DAP. The results showed that pseudo-lignin is polymeric (Mn ~ 1000 g/mol; Mw ~ 5000 g/mol) and consists of carbonyl, carboxylic, aromatic, methoxy and aliphatic structures, which can be produced from both dilute acid-treated cellulose and hemicellulose. During DAP, the hydrolysis of polysaccharides, which leads to some release of monosaccharides, and their subsequent dehydration reactions to form furfural and 5-hydromethylfurfural (HMF) takes place. Further rearrangements of furfural and/or HMF can produce aromatic compounds, which undergo further polymerization and/or polycondensation reactions to form pseudo-lignin. More importantly, pseudo-lignin was revealed to bind with cellulase enzymes unproductively and significantly retard enzymatic conversion of cellulose. As compared to native lignin after DAP, the inhibition effect arise from pseudo-lignin is much stronger, which clearly indicates pseudo-lignin formation should be avoided during DAP. Process optimization study indicated that addition of dimethyl sulfoxide (DMSO) to the DAP reaction medium can effectively increase sugar recovery and reduce pseudo-lignin formation, even under high-severity pretreatment conditions. The pseudo-lignin suppression property of DMSO has been attributed to the preferential arrangement of DMSO in the vicinity of the C1 carbon of the HMF molecule, thereby protecting HMF from further reactions to form pseudo-lignin.