Significant studies on phospholipases optimization, characterization, physiological role and industrial potential have been conducted worldwide. Some of them have been directed for biotechnological advances such as gene discovery and functional enhancement by protein engineering. Others reported phospholipases as virulence factor and major cause of pathophysiological effects. A general overview on phospholipase is needed for the identification of new reliable and efficient phospholipase, which would be potentially used in number of industrial and medical applications. Phospholipases catalyse the hydrolysis of one or more ester and phosphodiester bonds of glycerophospholipids. They vary in site of action on phospholipid which can be used industrially for modification/production of new phospholipids. Catalytically active phospholipase mainly use phosphatidylcholine as major substrate, but they can also show specificity with other phospholipids. Several accurate phospholipase assay methods are known, but a rapid and reliable method for high-throughput screening is still a challenge for efficient supply of superior phospholipases and their practical applications. Major application of phospholipase is in industries like oil refinery, health food manufacturing, dairy, cosmetics etc. All types of phospholipases can be involved as virulence factor. They can also be used as diagnostic markers for microbial infection. The importance of phospholipase in virulence is proven and inhibitors of the enzyme can be used as candidate for preventing the associated disease.