The United Nations Agenda 2030 Sustainable Development Goal 6 (SDG 6) aims at ensuring the availability and sustainable management of water and sanitation. The routine monitoring of water contaminants requires accurate and rapid analytical techniques. Laboratory analyses and conventional methods of field sampling still require considerable labor and time with highly trained personnel and transport to a central facility with sophisticated equipment, which renders routine monitoring cumbersome, time-consuming, and costly. Moreover, these methods do not provide information about the actual toxicity of water, which is crucial for characterizing complex samples, such as urban wastewater and stormwater runoff. The unique properties of bioluminescence (BL) offer innovative approaches for developing advanced tools and technologies for holistic water monitoring. BL biosensors offer a promising solution by combining the natural BL phenomenon with cutting-edge technologies. This review provides an overview of the recent advances and significant contributions of BL to SDG 6, focusing attention on the potential use of the BL-based sensing platforms for advancing water management practices, protecting ecosystems, and ensuring the well-being of communities.