Biosensors are now highly effective instruments for the quick and accurate identification of contaminants in water, providing a number of benefits over traditional analytical techniques. Because of their special qualities—such as high selectivity, adaptability to a variety of conditions, and simplicity of manipulation—microbes and microbial enzymes have attracted increasing attention as sensing elements for biosensor systems in recent times. Among various classes of biosensors available, microbially generated biosensors are affordable, small, lightweight, and portable. They are highly suitable for the identification and tracking of a wide range of contaminants due to their superior structural and functional properties. A variety of microbial enzymes, such as oxidoreductases, hydrolases, and lyases, can be utilized as potential biosensors. In this chapter, we have discussed the potential of microbial enzymes to be utilized as biosensors and also the varied advantages of microbial-based biosensors in wastewater remediation. Also, we have discussed the challenges and hurdles related to harnessing as well as utilizing various microbial-based biosensors for water pollution detection and management.