Across the planet, lignin is widely distributed as one of the most pervasive polymers in existence. It naturally exists as an inherent component of the plant's structure. In the paper industry, kraft lignin (KL) disposal in large amounts as waste by-product, may potentially result in toxicity to aquatic ecosystems. We can get more value from this plentiful polymer and convert it to value-added products instead of its disposal. Several methods have been described to degrade lignin. These procedures are frequently severe and harmful to the environment. Out of them, biological methods are eco-friendly, ensure consistent production, and cause lower toxicity to the environment. Due to their extensive environmental adaptability and easy genetic engineering, numerous ligninolytic bacteria have been found and studied for lignin use. This includes biodegradation and valorization of lignin into commercial compounds such as fuels, phenolic compounds, ferulic acid, polyhydroxyalkanoates (PHAs), and vanillin. Besides, ligninolytic enzymes produced from several microorganisms have tremendous applications in other industrial fields including textile dye effluent decolorization and bioremediation. This review elucidates the current approaches to lignin degradation. We give an overview of the recent research on the discovery and application of bacterial ligninolytic enzymes and their various optimization strategies. This article also includes the new applications for utilization of lignin as an economical and alternative-resource material either in the medical field or through biological conversion to value-added products and highlights future perspectives for the improvement of the lignin biodegradation process.