Soil improvement using biopolymers has attracted considerable attention in recent years, with the aim to reduce the harmful environmental effects of traditional materials, such as cement. This paper aims to provide a review on the environmental assessment of using biopolymers as binders in soil improvement, biopolymer-treated soil characteristics, as well as the most important factors affecting the behavior of the treated soil. In more detail, environmental benefits and concerns about the use of biopolymers in soil improvement as well as biopolymer–soil interaction are discussed. Various geotechnical properties are evaluated and compared, including the unconfined compressive strength, shear strength, erosion resistance, physical properties, and durability of biopolymer-treated soils. The influential factors and soil and environmental conditions affecting various geotechnical characteristics of biopolymer-treated soils are also discussed. These factors include biopolymer concentration in the biopolymer–soil mixture, moisture condition, temperature, and dehydration time. Potential opportunities for biopolymers in geotechnical engineering and the challenges are also presented.