Phosphonates are compounds containing a direct carbon–phosphorus (C–P) bond, which is particularly resistant to chemical and enzymatic degradation. They are environmentally ubiquitous: some of them are produced by microorganisms and invertebrates, whereas others derive from anthropogenic activities. Because of their chemical stability and potential toxicity, man-made phosphonates pose pollution problems, and many studies have tried to identify biocompatible systems for their elimination. On the other hand, phosphonates are a resource for microorganisms living in environments where the availability of phosphate is limited; thus, bacteria in particular have evolved systems to uptake and catabolize phosphonates. Such systems can be either selective for a narrow subset of compounds or show a broader specificity. The role, distribution, and evolution of microbial genes and enzymes dedicated to phosphonate degradation, as well as their regulation, have been the subjects of substantial studies. At least three enzyme systems have been identified so far, schematically distinguished based on the mechanism by which the C–P bond is ultimately cleaved—i.e., through either a hydrolytic, radical, or oxidative reaction. This review summarizes our current understanding of the molecular systems and pathways that serve to catabolize phosphonates, as well as the regulatory mechanisms that govern their activity.