Nanoparticles have gained considerable importance compared to bulk counterparts due to their unique properties. Due to their high surface to volume ratio and high reactivity, metallic and metal-oxide nanostructures have shown great potential applications. Among them, zinc oxide nanoparticles (ZnONPs) have gained tremendous attention attributed to their unique properties such as low toxicity, biocompatibility, simplicity, easy fabrication, and environmental friendly. Remarkably, ZnONPs exhibit optical, physical, antimicrobial, anticancer, anti-inflammatory and wound healing properties. These nanoparticles have been applied in various fields such as in biomedicine, biosensors, electronics, food, cosmetic industries, textile, agriculture and environment. The synthesis of ZnONPs can be performed by chemical, physical and biological methods. Although the chemical and physical methods suffer from some disadvantages such as the involvement of high temperature and pressure conditions, high cost and not environmentally friendly, the green synthesis of ZnONPs offers a promising substitute to these conventional methods. On that account, the microbial mediated synthesis of ZnONPs is clean, eco-friendly, nontoxic and biocompatible method. This paper reviews the microbial synthesis of ZnONPs, parameters used for the optimization process and their physicochemical properties. The potential applications of ZnONPs in biomedical, agricultural and environmental fields as well as their toxic aspects on human beings and animals have been reviewed.