Formation of inclusion bodies in bacterial hosts poses a major challenge for large scale recovery of bioactive proteins. The process of obtaining bioactive protein from inclusion bodies is labor intensive and the yields of recombinant protein are often low. Here we review the developments in the field that are targeted at improving the yield, as well as quality of the recombinant protein by optimizing the individual steps of the process, especially solubilization of the inclusion bodies and refolding of the solubilized protein. Mild solubilization methods have been discussed which are based on the understanding of the fact that protein molecules in inclusion body aggregates have native-like structure. These methods solubilize the inclusion body aggregates while preserving the native-like protein structure. Subsequent protein refolding and purification results in high recovery of bioactive protein. Other parameters which influence the overall recovery of bioactive protein from inclusion bodies have also been discussed. A schematic model describing the utility of mild solubilization methods for high throughput recovery of bioactive protein has also been presented.