Microbial enzymes play a crucial role in textile processing. They have substituted numerous dangerous and harmful chemicals owing to their environmentally favorable characteristics, widespread availability, simple production process, lack of toxicity, and selectivity toward substrates. These enzymes enhance the overall quality of the textile by catalyzing reactions at a faster rate, resulting in the conservation of water and energy. The processing of textiles primarily relies on using key enzymes such as amylases, laccases, cellulases, esterases, catalases, proteases, pectinases, etc., that are mostly bacterial or fungal in origin. Recent advancements in enzyme-based textile processing include depilling, desizing, and scouring, which help eliminate impurities; biopolishing aids in enhancing the fabric quality; denim washing to improve color and removal of hydrogen peroxide; depilling and felting of wool to prevent it from shrinkage. However, traditional textile processing methods have been observed to adversely affect the stability of enzymes. Genetic engineering and protein processing offer opportunities to modify enzymes that enhance their suitability and adaptability for harsh processing treatments. Further, the implementation of enzyme immobilization technology has improved enzyme usage efficiency and simplified the separation process. As a result, these biocatalysts have enhanced the cost-effectiveness and environmental sustainability of textile processing and production. The present chapter discusses the diverse enzymes employed in textile processing, along with the latest developments in enzyme-based technology within the textile processing sector.