Cypermethrin insecticide is widely used to prevent and control pest and crop diseases though, its residues have caused significant damage to the environment and living organisms. Microbial remediation becomes a popular approach to counter the toxicity of cypermethrin in both aquatic as well as terrestrial life. Cypermethrin can be effectively degraded to nontoxic compounds by bacterial and fungal strains. Various bacterial and fungal strains such as Ochrobactrum lupini DG-S-01, Bacillus sp. strain SG2, Azoarcus indigens strain HZ5, Streptomyces aureus strain HP-S-01, and Aspergillus oryzae M-4 are used for the cypermethrin degradation. Extensive usage of cypermethrin has caused problems such as surface water contamination, reduced fertility of the soil, detrimental effects on soil microbiota and non-targeted species. Due to environmental concerns associated with the cypermethrin in groundwater and food products, there is a crucial need to develop economical, rapid, and reliable techniques that can be used for field applications. An in-depth understanding of cypermethrin is explored in this review paper and possible solutions to mitigate its environmental toxicity are suggested.