Cyclodextrin glycosyltransferase (CGTase) is a multifunctional enzyme that hydrolyzes the <em>α</em>-glycosidic bond between two sugar molecules and synthesizes cyclodextrins (CDs) and other transglycosylation products. It is a ubiquitously present extracellular enzyme that offers the CGTase-producing organism the sole right onto starch substrates over other microbes. The present review provides a brief account of diversity among CGTase-producing microbes, CGTase production in different heterologous hosts (wherein extracellular secretion is highly desired), and different physicochemical properties of CGTases. Overall, 52 crystal structures that highlight the five domain tertiary structure of CGTases have been discovered so far. On the basis of these structures, the catalytic mechanism of CGTase reactions has been discussed, and three catalytic residues, namely Glu257, Asp229, and Asp328, have been identified at the active site in all CGTases. Moreover, the active site is constituted by at least nine sugar-binding sites, denoted as -7 to +2. Furthermore, a sequence alignment of selected CGTases highlighted the conserved regions and the sequential differences among <em>α</em>-CGTases, <em>β</em>-CGTases, and <em>γ</em>-CGTases. Various biotechnological applications of CGTases and CGTase immobilization on a variety of support matrices are briefly discussed. This review also encompasses a detailed account of CDs, their enzymatic production, extraction, and applications in different industrial sectors.