Biological treatment methods overcome many of the drawbacks of physicochemical strategies and play a significant role in removing dye contamination for environmental sustainability. Numerous microorganisms have been investigated as promising dye-degrading candidates because of their high metabolic potential. However, few can be applied on a large scale because of the extremely harsh conditions in effluents polluted with multiple dyes, such as alkaline pH, high salinity/heavy metals/dye concentration, high temperature, and oxidative stress. Therefore, extremophilic microorganisms offer enormous opportunities for practical biodegradation processes as they are naturally adapted to multi-stress conditions due to the special structure of their cell wall, capsule, S-layer proteins, extracellular polymer substances (EPS), and siderophores structural and functional properties such as poly-enzymes produced. This review provides scientific information for a broader understanding of general dyes, their toxicity, and their harmful effects. The advantages and disadvantages of physicochemical methods are also highlighted and compared to those of microbial strategies. New techniques and methodologies used in recent studies are briefly summarized and discussed. In particular, this study addresses the key adaptation mechanisms, whole-cell, enzymatic degradation, and non-enzymatic pathways in aerobic, anaerobic, and combination conditions of extremophiles in dye degradation and decolorization. Furthermore, they have special metabolic pathways and protein frameworks that contribute significantly to the complete mineralization and decolorization of the dye when all functions are turned on. The high potential efficiency of microbial degradation by unculturable and multi-enzyme-producing extremophiles remains a question that needs to be answered in practical research.