Methylotrophy is the ability to use reduced one-carbon compounds, such as methanol, as a single source of carbon and energy. Methanol is, due to its availability and potential for production from renewable resources, a valuable feedstock for biotechnology. Nature offers a variety of methylotrophic microorganisms that differ in their metabolism and represent resources for engineering of value-added products from methanol. The most extensively studied methylotroph is the Alphaproteobacterium Methylobacterium extorquens. Over the past five decades, the metabolism of M. extorquens has been investigated physiologically, biochemically, and more recently, using complementary omics technologies such as transcriptomics, proteomics, metabolomics, and fluxomics. These approaches, together with a genome-scale metabolic model, facilitate system-wide studies and the development of rational strategies for the successful generation of desired products from methanol. This review summarizes the knowledge of methylotrophy in M. extorquens, as well as the available tools and biotechnological applications.