The textile industry is one of the major sources of environmental pollution due to the excessive use of synthetic dyes, which are often toxic, recalcitrant, and cannot be degraded easily. Conventional treatment methods, such as coagulation, flocculation, and advanced oxidation processes, are quite effective but usually expensive and not environmentally friendly. Biological treatment, involving microbial activities and enzymatic processes, has been found to be an eco-friendly and inexpensive alternative for the degradation of dyes. Recent trends in biological treatment, which comprise microbial consortia, genetically engineered microorganisms, biofilm reactors, and hybrid approaches integrating both biological and physicochemical techniques, have been discussed in detail. Industrial-scale applications, through case studies of successful treatments and a comparative review of different methods of biological treatments in terms of efficiency, cost, and environment, have also been studied. Some key problems such as adaptation of microbe, toxicity, and strategies to optimize are further discussed. Future scenarios highlight the incorporation of biological treatment with state-of-the-art technologies for wastewater, along with designing policies to establish sustainable management practices for textile wastewaters.