Biotechnology, a new impetus in the last few years, has seen rapid developments in genetic manipulation techniques (genetic engineering) which introduces the possibility of producing organisms in order to optimize the production of established or novel metabolites of commercial importance and of transferring genetic material (genes) from one organism to another. Industrial biotechnology is the application of technical advances in life sciences to develop commercial products or to incorporate in industrial processes. Enzymes are being used in numerous new applications in the food, feed, agriculture, paper, leather, and textile industries which results in enhanced product quality along with significant reductions in cost and environmental pollution. The potential to harness biotechnology and produce new or modified fibers as well as improving the production yields of existing fibers is being studied. Novel fiber-forming biopolymers with biocompatibility and biodegradability are now being manufactured using large-scale fermentation equipment for medical applications. Natural biological fibers from natural raw materials possessing properties of synthetic fibers have entered the textile field. Enzymatic processes have replaced chemical methodologies in textile manufacturing to obtain a sustainable biobased economy. Biological processes play a major role in the removal of contaminants. The elimination of a wide range of waste materials and polluting substances from the environment is an absolute requirement to promote a sustainable development of our society with low environmental impact. Without such advances in science and technology, the move to a more biobased economy would result in rapid depletion of renewable resources and environmental degradation. The natural protein molecules, enzymes, have paved the way for interdisciplinary partnerships with various textile applications for exploring new avenues in the textile industry. Further research is required for the implementation of commercial enzyme-based processes for the biomodification of synthetic and natural fibers.