The utilization of synthetic pigments throughout the world for many pigmented industries poses compressible health risks to the environment and current well-being. Now the world is trying to turn to the new organic approach. Natural pigments derived from a variety of biological sources allow for greater biocompatibility and environmental sustainability. By assessing recent studies, we examine various sources of natural pigments, including plants, and microorganisms, and detailed synthesis and characterization. The review explores the different factors affecting the production of natural pigments and the way in which the fermentation conditions need to be optimized to obtain high-quality and purest products for intended uses. The review also addresses the stability and strategies for enhancing their stability. Moreover, we discuss the biological properties of natural pigments, highlighting their antioxidant, antimicrobial, anti-inflammatory, anticancer, and immune regulation properties. Finally, the wide range of applications of natural pigments in industries was discussed. Our studies highlight that natural colors can significantly contribute to health and environmental well-being. Future research should focus on finding sophisticated ways to make more stable natural colors and enhanced yield in terms of profitability and safety.