The increasing concerns about environmental and health issues associated with synthetic dyes have led to a growing interest in biocolours, natural dyes, and pigments sourced from plants, microbes, algae, and insects. This chapter closely examines to explore the environmental benefits and challenges of biocolour production and application, alongside the regulatory frameworks governing their use. Biocolours are biodegradable, non-toxic, and generally safer for our ecosystems and human health compared to synthetic dyes, which often contain carcinogenic and non-biodegradable compounds. Their use in industries such as textiles, food, cosmetics, and pharmaceuticals will significantly reduce chemical pollution. Despite numerous advantages, the large-scale production of biocolours may set certain environmental challenges, including the overharvesting of natural resources, excessive water usage, and energy consumption during extraction and processing. This chapter addresses sustainable production practices, such as microbial fermentation, use of agricultural waste, and eco-friendly extraction technologies that help minimize the environmental footprint. On the regulatory front, biocolours used in consumable goods must meet rigorous safety and quality standards set by national and international bodies such as the FDA, EFSA, BIS, and FSSAI. Regulatory frameworks differ across countries and product categories, often demanding detailed toxicological evaluations, standardization of extraction methods, and strict purity requirements. Additionally, the chapter also highlights the need for harmonized global regulations to promote broader adoption and trade of biocolours. By exploring both the ecological implications and policy requirements, this chapter aims to provide a comprehensive understanding of how biocolours can be effectively integrated into sustainable industry practices while complying with essential safety and quality standards.