Microbubble-based methods, in recent times, have been widely used for purification of water and wastewater. Microbubbles have several physicochemical properties, which make them eminently suitable for wastewater treatment. In this review, these properties have been analyzed in detail from the perspective of application. Various types of microbubble generators and their operation principles have been discussed. The transport of gas into the aqueous phase has been explained, and the correlations to predict the volumetric mass transfer coefficient have been presented. Many practical applications using ozone, oxygen and air microbubbles, some of which are currently at various stages of commercialization, have been presented. Other important uses of microbubbles for wastewater treatment, namely, removal of fine solid particulate matter and oil, have also been discussed. In addition, directions for future research of microbubble technology and their potential applications have been identified.