Microbubbles (MBs) and nanobubbles (NBs) refer to bubbles of micrometer to nanometer sizes. Due to several unique attributes, including long-term stability, negative surface charge, and the ability to generate reactive oxygen species, MB and NB technology has garnered significant attention in water and wastewater treatment and ecological restoration. Recently, several studies have shown the beneficial effects of MBs and NBs in membrane defouling, pathogen deactivation, environmental remediation, etc. However, there is limited knowledge of the physical and biochemical interactions between MBs and NBs and microbial communities; the mechanistic roles of MBs and NBs on micropollutants removal during aerobic wastewater treatment and anaerobic digestion; and the engineering limitations on versatility and scalability of MB and NB technology, among others. This review fills this gap by providing a systematic discussion on the fundamentals of MBs and NBs, including their size and concentration, physicochemical properties, and generation methods. The latest advances on MB and NB applications to water and wastewater treatment and ecological restoration are then critically discussed. The review thus identifies the challenges of implementing MB and NB technology and concludes with future research directions for a broader understanding of MB and NB technology.