Microbial compost plays a crucial role in improving soil health, soil fertility, and plant biomass. These biofertilizers, based on microorganisms, offer numerous benefits such as enhanced nutrient acquisition (N, P, and K), production of hydrogen cyanide (HCN), and control of pathogens through induced systematic resistance. Additionally, they promote the production of phytohormones, siderophore, vitamins, protective enzymes, and antibiotics, further contributing to soil sustainability and optimal agricultural productivity. The escalating generation of organic waste from farm operations poses significant threats to the environment and soil fertility. Simultaneously, the excessive utilization of chemical fertilizers to achieve high crop yields results in detrimental impacts on soil structure and fertility. To address these challenges, a sustainable agriculture system that ensures enhanced soil fertility and minimal ecological impact is imperative. Microbial composts, developed by incorporating characterized plant-growth-promoting bacteria or fungal strains into compost derived from agricultural waste, offer a promising solution. These biofertilizers, with selected microbial strains capable of thriving in compost, offer an eco-friendly, cost-effective, and sustainable alternative for agricultural practices. In this review article, we explore the potential of microbial composts as a viable strategy for improving plant growth and environmental safety. By harnessing the benefits of microorganisms in compost, we can pave the way for sustainable agriculture and foster a healthier relationship between soil, plants, and the environment.