The microbial fuel cell has been considered a promising alternative to traditional fossil energy. It has great potential in energy production, waste management, and biomass valorization. However, it has several technical issues, such as low power generation efficiency and operational stability. These issues limit the scale-up and commercialization of MFC systems. This review presents the latest progress in microbial community selection and genetic engineering techniques for enhancing microbial electricity production. The summary of substrate selection covers defined substrates and some inexpensive complex substrates, such as wastewater and lignocellulosic biomass materials. In addition, it also includes electrode modification, electron transfer mediator selection, and optimization of operating conditions. The applications of MFC systems introduced in this review involve wastewater treatment, production of value-added products, and biosensors. This review focuses on the crucial process of microbial fuel cells from preparation to application and provides an outlook for their future development.