Dioxins are a group of chloroaromatic compounds known to be toxic and carcinogenic, and persistent environmental pollutants. How to remedy dioxin-polluted environments is one of the most challenging problems in environmental technology. From ecological and economical viewpoints, biological methods using particular microorganisms and microbial consortia capable of dioxin transformation and degradation have greater appeal than physicochemical methods in their application for environmental remediation. Large numbers of microorganisms capable of degrading dioxins and dioxin-like compounds have been isolated and characterized. Information about the biodiversity, ecophysiology and molecular biology of dioxin-degrading microorganisms has accumulated particularly during the past decade. There are three major modes of microbial degradation and transformation of dioxins; that is, oxidative degradation by aerobic bacteria containing aromatic hydrocarbon dioxygenases, reductive dechlorination by anaerobic microorganisms and fungal oxidation with cytochrome P-450, lignin peroxidases and laccases. This article overviews the current knowledge of microbial degradation and transformation of dioxins as well as the biodiversity of microorganisms involved. Strategies directed towards the bioremediation of dioxin-polluted environments are discussed.