The sesquiterpene β-caryophyllene (BCP) is a major component of various plant essential oils, to which it confers a unique spicy aroma. It is mainly used as a fragrance additive in the food, cosmetic and perfume industries, with an annual consumption ranging between 100 and 1000 metric tons worldwide. Recently, BCP has attracted attention as a promising precursor for the production of high-density fuels and for its various biological activities and pharmacological effects. These include antioxidant, anti-inflammatory, anticancer, immune–modulatory, and many other activities. Due to its underlying mechanisms, β-caryophyllene interacts with various human receptors, including CB2 of the endocannabinoid system, which defines it as a phytocannabinoid with therapeutic potential for certain serious conditions. Due to β-caryophyllene’s high utility, various green and sustainable strategies for its production in microorganisms have been developed. This article provides an update on the state-of-the-art in this field to identify directions for further development to extend the compound’s potential.