The growing global population and higher living standards instantly demand the transition in the direction of a sustainable food system. A substantial section of means and agricultural lands are presently committed to protein-rich feed production to rear livestock for human consumption. Conversely, accelerated farming activities and the food industry have rendered a drastic increase in waste which impair the economic and environmental sustainability of the ecosystem. This situation emerges the need for developing an integrated technology for waste management and to improve sustainability footprints. Microbial protein (MP) production based on renewable electron and carbon sources has the potential as a substitute protein source. MP production for animal feed use is growing fast and is derived from bacteria, algae, and fungi including yeast. MP produced from all types of microbes is currently commercialized and in use. However, novel methods and processes are also under investigation to make MP production more economical and sustainable. Current research on MP has concentrated on the valorization of waste materials by using high protein content-containing microorganisms, which can then be used in animal feed. Using such kind of integrated approach, the agroindustry waste resources upcycling can contribute towards finding sustainable, cheaper, and environment-friendly protein sources. This review first describes the potential waste feedstock for MP production and summarizes the recent progress in the application of MP-producing microorganisms including fungus, yeast, bacteria, and phototrophic microbes. Bioprocesses, and production technology advances for MP production have been explored and discussed in detail. Finally, the MP application as animal feed, its challenges, and future perspectives in research have been evaluated.