Gamma-aminobutyric acid (GABA) is an important non-protein amino acid with wide-ranging applications. Currently, GABA can be produced by a variety of methods, including chemical synthesis, plant enrichment, enzymatic methods, and microbial production. Among these methods, microbial production has gained increasing attention to meet the strict requirements of an additive in the fields of food, pharmaceutical, and livestock. In addition, renewable and abundant resources, such as glucose and lignocellulosic biomass can also be used for GABA microbial production under mild and environmentally friendly processing conditions. In this review, the applications, metabolic pathways and physiological functions of GABA in different microorganisms were firstly discussed. A comprehensive overview of the current status of process engineering strategies for enhanced GABA production, including fermentation optimization and whole-cell conversion from different feedstocks by various host strains is also provided. We also presented the state-of-the-art achievements in strain development strategies for industrial lactic acid bacteria (LAB), Corynebacterium glutamicum and Escherichia coli to enhance the performance of GABA bioproduction. In order to use bio-based GABA in the fields of food and pharmaceutical, some Generally Recognized as Safe (GRAS) strains such as LAB and C. glutamicum will be the promising chassis hosts. Toward the end of this review, current challenges and valuable research directions/strategies on the improvements of process and strain engineering for economic microbial production of GABA are also suggested.