Textile industries utilize a variety of dyes and chemicals, resulting in wastewater that contains numerous hazardous components. The release of these dyes into aquatic systems poses a serious environmental and harms human health due to their persistence, recalcitrance, and nonbiodegradability. To address this, microbial bioremediation and nano‐photocatalysts are commonly employed for the effective removal of dyes and toxic compounds from textile effluents. This review explores the ecofriendly and efficient use of microbes, such as fungi, yeast, bacteria, and algae, in dye treatment, emphasizing their role in decolorization and degradation. Additionally, microbial remediation is highlighted as a clean, effective, and safe technology for detoxifying azo dyes in wastewater. The review also compares microbial and nanoparticle methods for dye removal from textile wastewater, examining the environmental impact of each approach. Furthermore, we have highlighted challenges and prospects for the development direction and future of this field.