The treatment of environmental pollution by microorganisms and their enzymes is an innovative and socially acceptable alternative to traditional remediation approaches. Microbial biodegradation is often characterized with high efficiency as this process is catalyzed via degrading enzymes. Various naturally isolated microorganisms were demonstrated to have considerable ability to mitigate many environmental pollutants without external intervention. However, only a small fraction of these strains are studied in detail to reveal the mechanisms at the enzyme level, which strictly limited the enhancement of the degradation efficiency. Accordingly, this review will comprehensively summarize the function of various degrading enzymes with an emphasis on catalytic mechanisms. We also inspect the expanded applications of these pollutant-degrading enzymes in industrial processes. An in-depth understanding of the catalytic mechanism of enzymes will be beneficial for exploring and exploiting more degrading enzyme resources and thus ameliorate concerns associated with the ineffective biodegradation of recalcitrant and xenobiotic contaminants with the help of gene-editing technology and synthetic biology.