Environmental contamination brought on by the discharge of wastewater from textile industries is a growing concern on a global scale. Textile industries produce a huge quantity of effluents containing a myriad of chemicals, mostly dyes. The discharge of such effluents into the aquatic environment results in pollution that adversely affects aquatic organisms. Synthetic dyes are complex aromatic chemical structures with carcinogenic and mutagenic properties in addition to high biological oxygen demand (BOD) and chemical oxygen demand (COD). This complex aromatic structure resists degradation by conventional techniques. The bioremediation approach is the biological clean-up of toxic contaminants from industrial effluents. Biological treatment methods produce less or no sludge and are cost-effective, efficient, and eco-friendly. Microorganisms, mostly microalgae and bacteria, and, in some instances, fungi, yeast, and enzymes decolorize textile dye compounds into simple, non-toxic chemical compounds. Following a thorough review of the literature, we are persuaded that microalgae and bacteria might be one of the potential decolorizing agents substituting for most other biological organisms in wastewater treatment. This article presents extensive literature information on textile dyes, their classification, the toxicity of dyes, and the bioremediation of toxic textile industry effluent utilizing microalgae and bacteria. Additionally, it combines data on factors influencing textile dye bioremediation, and a few suggestions for future research are proposed.