The Indian dye industry is globally recognized for production and export of every known class of dye. On the less attractive side of industrialization, they contribute considerably to environmental pollution. The dyes discarded by industries persist in the environment due to extremely slow rate of biodegradation. Moreover, these dyes are toxic to insects, birds and terrestrial life. The dyes also hamper the light penetration in water bodies, severely affecting the the process of photosynthesis. In spite of the problems associated with synthetic dye disposal, they are industrially preferred due to their fundamental requirement in enhancing overall appearance of goods, quality and cost effectiveness. Several studies have reported physicochemical techniques for remediation of dye effluents. Most of these techniques pose significant drawbacks due to their high energy and cost requirements. The bioremediation approach, on the other hand, offers advantages of sustainable environmental friendly processes to detoxify and degrade dyes into harmless products. This chapter provides an overview of the potential role of various physicochemical factors such as pH, temperature, oxygen and nutrient concentration in optimum decolorization of dyes by naturally isolated microbial strains. In addition, the role of cosubstrates, electron acceptors and microbial enzymes are also discussed.