The common steroid hormones are estrone (E1), 17 beta-estradiol (E2), estriol (E3), 17 alpha-ethinylestradiol (EE2), and testosterone (T). These steroids are reported to contaminate the environment through wastewater treatment plants. Steroid estrogens are widespread in the aquatic environment and therefore pose a potential risk, as exposure to these compounds has adverse impacts on vertebrates. Excessive exposure to steroid estrogens causes endocrine disruption in aquatic vertebrates, which affects the normal sexual life of these animals. Steroid pollutants also cause several health problems in humans and other animals. Microbial degradation is an efficient method for removing hormone pollutants from the environment by remediation. Over the last two decades, microbial metabolism of steroids has gained considerable attention due to its higher efficiency to reduce pollutants from the environment. The present review is focused on the major causes of steroid pollution, concentrations of these pollutants in surface water, groundwater, drinking water, and wastewater, their effect on humans and aquatic animals, as well as recent efforts by various research groups that seek better ways to degrade steroids by aerobic and anaerobic microbial systems. Detailed overview of aerobic and anaerobic microbial biotransformation of steroid estrogens and testosterone present in the environment along with the active enzyme systems involved in these biotransformation reactions is described in the review article, which helps readers to understand the biotransformation mechanism of steroids in depth. Other measures such as co-metabolic degradation, consortia degradation, algal, and fungal steroid biotransformation are also discussed in detail.