Keratin is a fibrous and recalcitrant protein found in feathers, nails, horns, hooves, and the epidermis of the skin. The presence of the high degree of disulfide bonds, hydrogen bonds, and hydrophobic interactions makes them resistant to mechanical stress and are not degraded by common proteases such as trypsin, pepsin, and papain. Due to the slow degradation of keratinous protein, accumulation of solid wastes from the poultry, slaughterhouse, textile, and leather industries leads to solid waste problems and other environmental and health related problems. In this review, efficient biodegradation of keratinous wastes by microorganisms, as a low-cost, environmentally friendly strategy has been discussed. Keratinases are the microbial proteases and hydrolyze the hard keratin. The decomposition of keratin by keratinases maintains the original structure of the final products, including short peptides, amino acids, and organic nitrogen which are deteriorated when traditional or chemical method is implemented. In this article, the role of keratinases producing bacterial and fungal species and their attributes has been elaborated, along with the biochemical characteristics of keratinases, and further, protein engineering approaches has been discussed, with the prospects to enhance keratinases activity for their biotechnological applications.