Abstract: Lignocellulose is the most abundant renewable biomass resource on the earth and cellulose is one of the three components of lignocellulose and is important raw material for the production of bio-based materials, fuels and chemicals. However, the complex chemical structure of lignin limits the application of lignocellulose. Conventional physical, chemical and physical-chemical lignin degradation methods often require high temperature and high pressure conditions, resulting in high energy consumption, inhibitors and environmental pollution. The biocatalysis process mediated by microorganisms is usually carried out under mild conditions, which can reduce energy input and provide a more specific and effective choice for the utilization of lignin. The degradation of lignin by fungi, represented by white-rot fungi, presents the problems of long pretreatment cycle and poor adaptability to the environment. Bacterium becomes the future potential of lignin degradation, owing to its rapid proliferation, profound environmental adaptability and easy genetic manipulation. This review introduced the progress of microbial degradation of lignin on the base of chemical structure, and mainly analyzed the microorganisms (fungi and bacteria), degrading enzymes (peroxidase and laccase) as well as the degradation mechanism. Besides, the applications of microbial degraded lignin in lipids, bioplastics, vanillin and wastewater treatment were summarized and the future development was suggested.