Global food security is seriously threatened by several issues facing modern intensive agriculture methods. To boost agricultural productivity and fulfill the nutritional demands of the world’s increasing population, there is extensive reliance on chemical fertilizers and pesticides. However, the unconcerned application of agrochemicals has led to environmental contamination that poses hazards to human health. Furthermore, the quality and physical characteristics of agricultural soils, together with their chemical (nutrient imbalance) and biological health, are progressively declining. Today, biofertilization is one of the environmentally friendly methods used in sustainable agriculture. Utilizing biofertilizers boosts plant productivity through raising nitrogen and fertility levels of the soil, as they are biodegradable. Biofertilizers consist of living microorganisms that enhance soil fertility naturally, without causing environmental pollution. The organisms include microbes such as bacteria, microfungi, and microalgae, as well as macroorganisms, macrofungi, and macroalgae. The biofertilizers are biodegradable in nature; they did not build up any residues in soil like chemical or synthetic fertilizers. The use of biofertilizers helps maintain soil health and supports the pursuit of sustainable agriculture. Because of their unique properties, biofertilizers contribute to healthy plant development, resulting in improved produce quality and increased plant biomass. They promote better plant growth by enhancing nutrient availability, regulating phytohormones, controlling phytopathogens, and reducing both biotic and abiotic stresses. The formulation of biofertilizers involves preparing inoculums with cell protectants such as glycerol, lactose, and starch, which serve as suitable carrier materials. Proper packaging and efficient distribution methods are also essential components of the preparation process. Recent advancements in biofertilizer technology include techniques like entrapment or microencapsulation, nano-immobilization of microbial inoculants, and biofilm-based formulations. This chapter provides a comprehensive overview of the current progress in utilizing microbial strains as biofertilizers and highlights their significant role in improving soil fertility and crop productivity.