Organophosphorus (OP) xenobiotics are used worldwide as pesticides and petroleum additives. OP compounds share the major portion of the pesticide market globally. Owing to large-scale use of OP compounds, contaminations of soil and water systems have been reported from all parts of the world. OP compounds possess very high mammalian toxicity and therefore early detection and subsequent decontamination and detoxification of the polluted environment is essential. Additionally, about 200,000 tons of extremely toxic OP chemical warfare agents are required to be destroyed by 2007 under Chemical Warfare Convention (1993). Chemical and physical methods of decontamination are not only expensive and time-consuming, but also in most cases they do not provide a complete solution. These approaches convert compounds from toxic into less toxic states, which in some cases can accumulate in the environment and still be toxic to a range of organisms. Bioremediation provides a suitable way to remove contaminants from the environment as, in most of the cases, OP compounds are totally mineralized by the microorganisms. Most OP compounds are degraded by microorganisms in the environment as a source of phosphorus or carbon or both. Several soil bacteria have been isolated and characterized, which can degrade OP compounds in laboratory cultures and in the field. The biochemical and genetic basis of microbial degradation has received considerable attention. Several genes/enzymes, which provide microorganisms with the ability to degrade OP compounds, have been identified and characterized. Some of these genes and enzymes have been engineered for better efficacy. Bacteria capable of complete mineralization are constructed by transferring the complete degradation pathway for specific compounds to one bacterium. In the present article, we review microbial degradation and metabolic pathways for some OP compounds. The biochemical and molecular basis of OP degradation by microbes and the evolution and distribution of genes/enzymes are also reviewed. This article also examines applications and future use of OP-degrading microbes and enzymes for bioremediation, treatment of OP poisoning, and as biosensors.