Through innovative bioelectrochemical technology, MFCs provide water treatment solutions that generate reusable bioenergy. The conversion of organic pollutants in wastewater by microorganisms through microbial fuel cells (MFCs) produces electrical energy, providing a novel method for wastewater management and the generation of green energy. MFC fundamentals, design components, and operational principles are investigated by examining power density in conjunction with coulombic efficiency and chemical oxygen demand (COD) removal. According to this study, the performance of MFCs depends on the electrode materials, microbial communities, and optimisation strategies for the system. Before technological development can resolve these barriers, the chapter focuses on commercial MFC scale-up limitations, including reduced power output, electrode degradation problems, and system maintenance issues. This work evaluates three emerging research directions in MFC studies: combining different MFC systems, improving microbial communities and their associated optimization approaches, and self-powered biosensing technologies. This research evaluates how MFCs can support sustainable wastewater cleanup while providing decentralized power generation capabilities for isolated locations and discusses their market potential in building a circular economy framework. Future developments in MFC technology hold promise through active materials research combined with improved system designs and microbial modifications, which may become essential for addressing global power and environmental issues.