With the rising demand for natural compounds, biological pigments have a great impact because of their non-adverse effects in environment and on human health. Additionally, their specific characteristics viz. antimicrobial, antioxidants, and anti-cancer, make them important in many applied areas such as the food industry, cosmetics, and pharmacy. The great biological diversity of biopigments allows their use with a range of possibilities. Pigments derived from fungi and bacteria (such as Monascus, Pseudomonas, Serratia, Penicillium among others) have important role in human health. Microbial production of biopigments can cater the growing demand of biopigments in the world. Microbial production of biopigments have several challenges such low yield, high production cost and the down-stream recovery of biopigments. Selection of appropriate microorganism and growth conditions, carbon and nitrogen source are key parameters for the scale-up production. Here, we describe the potential of filamentous fungi, yeast and bacteria for the production of biopigments, and their potential applications.