Textile dyes pose a major environmental threat due to their toxicity, persistence in water bodies, and resistance to conventional wastewater treatment. To address this, researchers have explored biological and physicochemical degradation methods, focusing on microbial, photolytic, and nanoparticle-mediated approaches, among others. Microbial degradation depends on fungi, bacteria, yeasts, and algae, utilizing enzymatic pathways involving oxidoreductases like laccases, peroxidases, and azoreductases to breakdown or modify complex dye molecules. Photolytic degradation employs hydroxyl radical generation and electron-hole pair formation, while nanoparticle-mediated degradation utilizes titanium dioxide (TiO2), zinc oxide (ZnO), and silver (Ag) nanoparticles to enhance dye removal. To improve efficiency, microbial consortia have been developed to enhance decolorization and mineralization, offering a cost-effective and eco-friendly alternative to physicochemical methods. Photocatalytic degradation, particularly using TiO2, harnesses light energy for dye breakdown. Research advancements focus on shifting TiO2 activation from UV to visible light through doping and composite materials, while optimizing surface area and mesoporosity for better adsorption. Nanoparticle-mediated approaches benefit from a high surface area and rapid adsorption, with ongoing improvements in synthesis, functionalization, and reusability, particularly through magnetic nanoparticle integration. These emerging technologies provide sustainable solutions for dye degradation. The primary aim of this review is to comprehensively evaluate and synthesize current research and advancements in the degradation of azo dyes through microbial methods, photolytic processes, and nanotechnology-based approaches. The review also provides detailed information on salient mechanistic aspects of these methods, efficiencies, advantages, challenges, and potential applications in industrial and environmental contexts.