In recent years, India has emerged as a promising industrial hub. It has a cluster of textile, dyeing, and printing industries. The adjoining rivers/water bodies receive mostly untreated discharge from these industries. Textile industrial effluent contains various contaminants (dyes, heavy metals, toxicants, and other organic/inorganic dissolved solids) that alter the physico-chemical properties of adjoining land and waterbodies in which it is discharged, thereby degrading the water quality and subsequently affecting the landscapes in the vicinity. This ultimately affects the flora and fauna of the locale and has adverse effects on human health. Out of the total dyes (approximately 10,000 dyes) exploited in the textile dyeing and printing units, azo dyes possess a complex structure and are synthetic in origin. They contribute nearly 70% to the total effluent discharge. Biological processes are based on the ability of inhabiting indigenous microorganisms in these contaminated environments to tolerate, resist, decolorize/degrade, and mitigate the recalcitrant compounds. Exploring microbes with higher efficacy of azo dye degradation can reduce the amount of chemical discharged from the process. The present review explores the potential of microbial diversity for the development of an effective bioremediation approach. The review also includes the impact of azo dyes on the flora and fauna, as well as conventional and microbe-assisted nanoparticle technology for treatment of the textile wastewater targeting the degradation of dye contaminants.