Textile production and finishing is a vital area in the textile sector due to its advancements in various functional applications. The textile production sector uses multiple chemicals to process natural and synthetic fabrics and discharges toxic materials into the natural environment. Consequently, it is necessary to reevaluate and improve the methods used as well as the production procedures. Biotechnology has made manufacturing processes more effective and eco-friendlier, which has a significant impact on the textile sector. Reducing the consumption of natural resources, hazardous chemicals, waste material formation, resulting costs, and energy consumption are all made possible by utilizing sustainable production techniques. This development in the textile sector has been accelerated because of the efficient and promising results of biotechnology. Many chemical processes used in textile production have been replaced with more promising and environmentally friendly biological treatments. To achieve a sustainable bio-based economy, the use of enzymatic methods has been widely considered in the textile sector. Different biological procedures have been employed to remove toxic and hazardous materials from the effluent emitted into the environment. In this chapter, current advancements and the application of biotechnological methods in textile production have been discussed. It has also aimed to provide new guidelines for traders, academic researchers, and the textile community to take steps toward the use of biotechnology in textile production.