<p>Synthetic dyes from textile and other industrial sectors are persistent pollutants and composed of complex aromatic structures, which makes them resistant to the conventional methods of treatment. In recent years, white rot fungi like <i>Pleurotus</i> spp. have received promising attention as an environmentally friendly green alternative for dye detoxification and decolorization. Extracellular ligninolytic enzymes produced from such white rot fungi (like laccase, LiP or lignin peroxidase, MnP or manganese peroxidase, DyP or dye-decolorizing peroxidase) oxidize a wide spectrum of dyes synergistically. In its mechanism, dye adsorption on the biomass of fungi occurs initially, followed by the disruption of chromophore, breakdown of azo bonds, and the progressive aromatic rings’ degradation by the enzymatic oxidation process. Immobilization strategies, optimization process, and integration with advanced methods of oxidation may make this green method more promising and effective. Overall, <i>Pleurotus</i> strains and their enzymes represent a sustainable, eco-friendly, green, and versatile technique for bioremediation of dye molecules. Wide enzymatic capability and adaptability of such fungi highlight the potential of addition in the systems of next-generation wastewater treatment, principally when united with advanced method schemes that improve the stability, scalability, and safety of the finally treated effluents. This review has been prepared to explore the advantages and challenges associated with the use of <i>Pleurotus</i> species and their enzymes in dye bioremediation. Insightful, systematic and critical discussions have been performed on the potential mechanisms, various factors affecting the decolorization process, potential challenges, bottlenecks, and possible solutions. Techno-economic feasibility of <i>Pleurotus</i> species and their enzyme-based systems in dye’s bioremediation process has also been critically assessed and explored along with conclusion and future perspectives.</p>