Release of industrial effluent into waterbodies is the major reason for the pollution of aquatic ecosystem. The major contaminant in this effluent is the azo dyes. These azo dyes are employed to impart the characteristic colour to the textiles, leather, cosmetics, paint, paper, plastics and all. Azo dyes are the man-made synthetic compounds that have the specific azo bond (N = N). They are also called as xenobiotics, the foreign compounds that are often refractory to degradation. Release of used dyes into the water resources is highly hazardous. These staining dyes reduce the transparency of water and prevent the light to penetrate into it. Further it reduces the dissolved oxygen content in the waterbodies. Without light and oxygen, all the organisms in the aquatic ecosystem are greatly affected. Further, human consumption of that water or the animals from that waterbody is highly toxic as these azo dyes can induce mutation and cause cancer. Several mechanical and chemical techniques are being used to eliminate the dye from the effluent and to reduce its toxicity. But these physiochemical techniques didn’t remove the hazardous compounds completely and produce toxic by-products. Biodegradation is the method of breaking down of carbon based compounds using microbes like bacteria, algae and fungi. As the microbes produce several enzymes, they have the metabolic ability to degrade them. Thus, microbes can be used to reduce these azo dyes. This method is cheap and eco-friendly. Owing to the emerging advancements in nanotechnology, nanoparticles (Nps) serve to be a promising means of degradation of azo dyes. Nps with their increased surface area, get oxidized and reduce the dye molecules. Further, nanozymes are the nano-sized particles with enzyme-like activity. It is a nano-metal that act like an enzyme and degrade the toxic dye compounds. It is believed to be the product of biotechnological and nano technological innovations. This review is aimed to give a critical analysis on the toxic nature of industrial effluent and to make a comparative study on the efficiency of using microbeds, Nps and Nz to degrade the toxic compounds.