Azoreductases are diverse flavoenzymes widely present among microorganisms and higher eukaryotes. They are mainly involved in the biotransformation and detoxification of azo dyes, nitro-aromatic, and azoic drugs. Reduction of azo bond and reductive activation of pro-drugs at initial level is a crucial stage in degradation and detoxification mechanisms. Using azoreductase-based microbial enzyme systems that are biologically accepted and ecofriendly demonstrated complete degradation of azo dyes. Azoreductases are flavin-containing or flavin-free group of enzymes, utilizing the nicotinamide adenine dinucleotide or nicotinamide adenine dinucleotide phosphate as a reducing equivalent. Azoreductases from anaerobic microorganisms are highly oxygen sensitive, while azoreductases from aerobic microorganisms are usually oxygen insensitive. They have variable pH, temperature stability, and wide substrate specificity. Azo dyes, nitro-aromatic compounds, and quinones are the known substrates of azoreductase. The present review gives an overview of recent developments in the known azoreductase enzymes from different microorganisms, its novel classification scheme, significant characteristics, and their plausible degradation mechanisms.