Lipases are versatile biocatalysts and are used in different bioconversion reactions. Microbial lipases are currently attracting a great amount of attention due to the rapid advancement of enzyme technology and its practical application in a variety of industrial processes. The current review provides updated information on the different sources of microbial lipases, such as fungi, bacteria, and yeast, their classical and modern purification techniques, including precipitation and chromatographic separation, the immunopurification technique, the reversed micellar system, aqueous two-phase system (ATPS), aqueous two-phase flotation (ATPF), and the use of microbial lipases in different industries, e.g., the food, textile, leather, cosmetics, paper, and detergent industries. Furthermore, the article provides a critical analysis of lipase-producing microbes, distinguished from the previously published reviews, and illustrates the use of lipases in biosensors, biodiesel production, and tea processing, and their role in bioremediation and racemization.