Jute, eco-friendly natural fiber, depends on conventional water-based microbial retting process that suffers from the production of low-quality fiber, restricting its diversified applications. The efficiency of water retting of jute depends on plant polysaccharide fermenting pectinolytic microorganisms. Understanding the phase difference in retting microbial community composition is crucial to provide knowledge on the functions of each member of microbiota for the improvement of retting and fiber quality. The retting microbiota profiling of jute was commonly performed previously using only one retting phase with culture-dependent methods which has limited coverage and accuracy. Here, for the first we have analyzed jute retting water through WGS metagenome approach in three phases (pre-retting, aerobic retting, and anaerobic retting phases) and characterized the microbial communities both culturable and non-culturable along with their dynamics with the fluctuation of oxygen availability. Our analysis revealed a total of 25.99 × 104 unknown proteins (13.75%), 16.18 × 105 annotated proteins (86.08%), and 32.68 × 102 ribosomal RNA (0.17%) in the pre-retting phase, 15.12 × 104 unknown proteins (8.53%), 16.18 × 105 annotated proteins (91.25%), and 38.62 × 102 ribosomal RNA (0.22%) in the aerobic retting phase, and 22.68 × 102 ribosomal RNA and 80.14 × 104 (99.72%) annotated protein in the anaerobic retting phase. Taxonomically, we identified 53 different phylotypes in the retting environment, with Proteobacteria being the dominant taxa comprising over 60% of the population. We have identified 915 genera from Archaea, Viruses, Bacteria, and Eukaryota in the retting habitat, with anaerobic or facultative anaerobic pectinolytic microflora being enriched in the anoxic, nutrient-rich retting niche, such as Aeromonas (7%), Bacteroides (3%), Clostridium (6%), Desulfovibrio (4%), Acinetobacter (4%), Enterobacter (1%), Prevotella (2%), Acidovorax (3%), Bacillus (1%), Burkholderia (1%), Dechloromonas (2%), Caulobacter (1%) and Pseudomonas (7%). We observed an increase in the expression of 30 different KO functional level 3 pathways in the final retting stage compared to the middle and pre-retting stages. The main functional differences among the retting phases were found to be related to nutrient absorption and bacterial colonization. These findings reveal the bacterial groups that are involved in fiber retting different phases and will facilitate to develop future phase-specific microbial consortia for the improvement of jute retting process.