Recovery of bioenergy and biochemicals from wastewater has attracted growing and widespread interests. In this respect, two-stage bioconversion process (TSBP) offers an appealing avenue to achieve stepwise and directional substrate conversion in separated stages. Such a biosystem not only enables enhanced degradation of organics, but also favors a high product yield and quality. Various TSBRs have been developed for the production of methane, hydrogen, electricity, bioplastics, bioflocculants, biopesticides, biosurfactants and other value-added products, demonstrating marked advantages over the conventional one-stage processes. It represents a promising, and likely the sole viable, paradigm for future application. However, there are also many remaining challenges. This paper provides an overview of the various TSBPs, introduces the recent advances, and discusses the major challenges and the future perspectives for practical application.