Microbial transglutaminase is an important enzyme in food processing for improving protein properties by catalyzing the cross-linking of proteins. Recently, this enzyme has been shown to exhibit wider potential application in tissue engineering, textiles and leather processing, site-specific protein conjugation and wheat gluten allergy reduction. The production of microbial transglutaminase has been significantly improved thanks to advances in bioprocess engineering and genetic engineering during the last three decades. More recently, studies on the biological mechanism of transglutaminase synthesis have further contributed towards the understanding of microbial transglutaminase production by Streptomyces. This will further facilitate improving the production of recombinant microbial transglutaminase. In this paper, we will review the progress in bioprocess engineering and genetic engineering in microbial transglutaminase production. We will highlight our understanding of the biological mechanisms of microbial transglutaminase synthesis, including biotechnological approaches used based on these biological mechanisms as a way of improving transglutaminase production.We address in addition the future research needs for microbial transglutaminase production.