This article presents an in‐depth overview of recent developments and prospects in utilizing green microbiology for sustainable water management. It highlights its vital role across various aspects of water management while underscoring its significance for global development. This article delves deep into microbial processes integral to water management, such as degrading pollutants and using biosensors for quality monitoring of drinking water supplies. Furthermore, the article considers microorganisms' potential roles as biofertilizers and biostimulants in agriculture, their involvement in effluent treatment within microbial communities, and the emerging technologies of microbial fuel cells and nanotechnology. Implementation of microbial‐based approaches presents both challenges and opportunities, including regulatory concerns and public acceptance. Finally, this article reviews key findings and emphasizes research needs related to green microbiology to develop solutions towards cleaner, more sustainable water management solutions in the future.