The interaction between microbes and clay plays an important role in the cycling of elements and the elimination of contaminants from the environment. Microbial activity has reduced structural iron (Fe) in clay minerals, which is an important mechanism in soil pollution bioremediation. Also, clay-based materials have been employed in the microbial load reduction of bacteria-laden water by exploiting microbe-clay interactions. Reduction of smectites by microorganisms has been reported to be notable and significant in the contaminant remediation processes. However, the type of contamination, properties of clays involved, and associated microorganisms have had a remarkable influence on one another. The bacterium Shewanella has been found to be effective in bioreduction processes, while the fungus Aspergillus niger has proven very effective in biobeneficiation of clay, with reports of efficient elimination of dangerous elements in water. This review discusses activities of microorganisms on clays comprising bioreduction, bioremediation, biobeneficiation, and biodegradation and highlights certain current challenges and future perspectives in microbe-clay interactions. In conclusion, an understanding of the dynamics of this interaction, can help improve the design and manufacture of purification materials for domestic and industrial use.