Lignocellulosic biomass, such as plant residues and agricultural waste, holds immense potential as a renewable resource for the production of biofuels, chemicals, and animal feed. However, the efficient degradation of lignocellulose into fermentable sugars remains a significant challenge. Recent research has highlighted the critical role of microbial diversity in lignocellulosic biomass degradation, offering new insights from a biotechnological perspective. The comprehension and utilization of microbial diversity are crucial for developing efficient biotechnological strategies for lignocellulosic biomass degradation. By uncovering the intricate relationships between microbial communities and their enzymatic machinery, researchers can optimize degradation processes, enhance biofuel production, and contribute to a more sustainable bio‐based economy. Microorganisms, including bacteria, fungi, and archaea, possess diverse enzymatic capabilities, allowing them to secrete a plethora of lignocellulolytic enzymes. Microbial organisms inhabiting extreme environments, such as the rumen, hot and cold springs, deep sea trenches, and acidic and alkaline pH environments, exhibit significant potential in generating enzymes, including hemicellulolytic and lignocellulolytic enzymes, which possess superior biochemical properties essential for industrial bioconversion applications. This review explores the ability of lignocellulosic enzymes from microbial sources to efficiently break down the lignocellulosic biomass and their potential applications in industrial biotechnology.