<p>Limonene is a naturally occurring monocyclic monoterpene that is a substrate for the sustainable production of high-value bioactive compounds for green chemistry, perfumes, cosmetics, and pharmaceuticals. Despite being promising, the application of limonene industrially is limited because of its high volatility, low solubility, and cytotoxic action towards microbial hosts. Value-added compounds such as carveol, carvone, perillyl alcohol, perillic acid, and limonene-1,2-diol are produced from limonene through microbial biotransformation. This review explores the role of bacteria, yeast, and fungi in these bioconversions, detailing key enzymatic reactions like hydroxylation, oxidation, epoxidation, and dihydroxylation. The influence of limonene enantiomers on product formation and specificity of biotransformation is discussed, along with applications of the resulting compounds in therapeutic, aromatic, and industrial domains. It also summarizes current challenges and future opportunities for industrial-scale production, including substrate and product toxicity, limitations of enzymatic reaction, and process scalability. On comparison with earlier reviews that addressed the biological and industrial aspects of limonene separately, this review provides a comprehensive approach that combines metabolic engineering, biosynthesis, microbial biotransformation, and therapeutic potential. It also emphasizes chemoenzymatic methodologies, providing a thorough framework that links biomedical applications with green bioprocessing and highlights new prospects for the industrial valorization of limonene and its derivatives.</p> Graphical abstract <p></p>