Many microorganisms, especially bacteria, produce biosurfactants when grown on water-immiscible substrates. Biosurfactants are more effective, selective, environmentally friendly, and stable than many synthetic surfactants. Most common biosurfactants are glycolipids in which carbohydrates are attached to a long-chain aliphatic acid, while others, like lipopeptides, lipoproteins, and heteropolysaccharides, are more complex. Rapid and reliable methods for screening and selection of biosurfactant-producing microorganisms and evaluation of their activity have been developed. Genes involved in rhamnolipid synthesis (rhlAB) and regulation (rhlI and rhlR) in Pseudomonas aeruginosa are characterized, and expression of rhlAB in heterologous hosts is discussed. Genes for surfactin production (sfp, srfA, and comA) in Bacillus spp. are also characterized. Fermentative production of biosurfactants depends primarily on the microbial strain, source of carbon and nitrogen, pH, temperature, and concentration of oxygen and metal ions. Addition of water-immiscible substrates to media and nitrogen and iron limitations in the media result in an overproduction of some biosurfactants. Other important advances are the use of water-soluble substrates and agroindustrial wastes for production, development of continuous recovery processes, and production through biotransformation. Commercialization of biosurfactants in the cosmetic, food, health care, pulp- and paper-processing, coal, ceramic, and metal industries has been proposed. However, the most promising applications are cleaning of oil-contaminated tankers, oil spill management, transportation of heavy crude oil, enhanced oil recovery, recovery of crude oil from sludge, and bioremediation of sites contaminated with hydrocarbons, heavy metals, and other pollutants. Perspectives for future research and applications are also discussed.