DyP peroxidases comprise a novel superfamily of heme-containing peroxidases, which is unrelated to the superfamilies of plant and animal peroxidases. These enzymes have so far been identified in the genomes of fungi, bacteria, as well as archaea, although their physiological function is still unclear. DyPs are bifunctional enzymes displaying not only oxidative activity but also hydrolytic activity. Moreover, these enzymes are able to oxidize a variety of organic compounds of which some are poorly converted by established peroxidases, including dyes, β-carotene, and aromatic sulfides. Interestingly, accumulating evidence shows that microbial DyP peroxidases play a key role in the degradation of lignin. Owing to their unique properties, these enzymes are potentially interesting for a variety of biocatalytic applications. In this review, we deal with the biochemical and structural features of DyP-type peroxidases as well as their promising biotechnological potential.