Diuron (DUR) is a phenylurea herbicide widely used for the effective control of most annual and perennial weeds in farming areas. The extensive use of DUR has led to its widespread presence in soil, sediment, and aquatic environments, which poses a threat to non-target crops, animals, humans, and ecosystems. Therefore, the removal of DUR from contaminated environments has been a hot topic for researchers in recent decades. Bioremediation seldom leaves harmful intermediate metabolites and is emerging as the most effective and eco-friendly strategy for removing DUR from the environment. Microorganisms, such as bacteria, fungi, and actinomycetes, can use DUR as their sole source of carbon. Some of them have been isolated, including organisms from the bacterial genera Arthrobacter, Bacillus, Vagococcus, Burkholderia, Micrococcus, Stenotrophomonas, and Pseudomonas and fungal genera Aspergillus, Pycnoporus, Pluteus, Trametes, Neurospora, Cunninghamella, and Mortierella. A number of studies have investigated the toxicity and fate of DUR, its degradation pathways and metabolites, and DUR-degrading hydrolases and related genes. However, few reviews have focused on the microbial degradation and biochemical mechanisms of DUR. The common microbial degradation pathway for DUR is via transformation to 3,4-dichloroaniline, which is then metabolized through two different metabolic pathways: dehalogenation and hydroxylation, the products of which are further degraded via cooperative metabolism. Microbial degradation hydrolases, including PuhA, PuhB, LibA, HylA, Phh, Mhh, and LahB, provide new knowledge about the underlying pathways governing DUR metabolism. The present review summarizes the state-of-the-art knowledge regarding (1) the environmental occurrence and toxicity of DUR, (2) newly isolated and identified DUR-degrading microbes and their enzymes/genes, and (3) the bioremediation of DUR in soil and water environments. This review further updates the recent knowledge on bioremediation strategies with a focus on the metabolic pathways and molecular mechanisms involved in the bioremediation of DUR.