Epimedium is a classical Chinese herbal medicine, which has been used extensively to treat various diseases, such as sexual dysfunction, osteoporosis, cancer, rheumatoid arthritis, and brain diseases. Flavonoids, such as icariin, baohuoside I, icaritin, and epimedin C, are the main active ingredients with diverse pharmacological activities. Currently, most Epimedium flavonoids are extracted from Epimedium plants, but this method cannot meet the increasing market demand. Biotransformation strategies promised huge potential for increasing the contents of high-value Epimedium flavonoids, which would promote the full use of the Epimedium herb. Complete biosynthesis of major Epimedium flavonoids by microbial cell factories would enable industrial-scale production of Epimedium flavonoids. This review summarizes the structures, pharmacological activities, and biosynthesis pathways in the Epimedium plant, as well as the extraction methods of major Epimedium flavonoids, and advancements in the biotransformation and complete microbial synthesis of Epimedium flavonoids, which would provide valuable insights for future studies on Epimedium herb usage and the production of Epimedium flavonoids.