Lemon peel is the major by-product of lemon juice processing and is currently underutilized. In this study, we explored the feasibility of using lemon peel as a raw material for making vinegar. Lemon peel was homogenized, treated with pectinase (30,000 U/g, 0.1%) at 50 °C for 4 h, and then filtered. The obtained lemon peel juice was first subjected to alcoholic fermentation bySaccharomyces cerevisiaevar. FX10, and then acetic fermentation by an acid tolerantAcetobacter malorum, OQY-1, which was isolated from the lemon peels. The juice yield of the lemon peel was 62.5%. The alcoholic fermentation yielded a lemon peel wine with an alcoholic content of 5.16%, and the acetic acid fermentation produced a vinegar with a total acid content of 5.04 g/100 mL. A total of 36 volatile compounds were identified from the lemon vinegar, with some compounds such as esters and some alcohols that increased significantly during alcoholic fermentation while alcohols, terpenoids, and some esters decreased significantly during the fermentations. E-nose and E-tongue analyses coupled with principal component and discriminant factor analyses (PCA and DFA) were able to discriminate the samples at different fermentation stages. Overall, this work demonstrates the potential to transform lemon peel into a valuable product, thus reducing the waste of lemon processing and adding value to the industry.