Bioactive textile materials are a promising field in the development of functional textiles. The integration of bioactive compounds, such as natural dyes, into textiles offers a range of benefits, including UV protection, anti-microbial properties, and insect repellency. Natural dyes have been shown to have bioactivity, and their integration into textiles has been extensively studied. The application of natural dyes on textile substrates will be an advantage for their inherent functional properties along with their non-toxic and eco-friendly nature. This review addresses the effect of natural dyes on surface modification of most used natural and synthetic fibers and its subsequent effects on their anti-microbial, UV protection and insect repellent properties with natural dyes. Natural dyes have proved to be environmentally friendly in an attempt to improve bioactive functions in textile materials. This review provides a clear view of sustainable resources for the dyeing and finishing of textiles to develop a cleaner pathway of bioactive textiles using natural dyes. Furthermore, the dye source, advantages and disadvantages of natural dye, main dye component, and chemical structure are listed. However, there is still a need for interdisciplinary research to further optimize the integration of natural dyes into textiles and to improve their bioactivity, biocompatibility, and sustainability. The development of bioactive textile materials using natural dyes has the potential to revolutionize the textile industry and to provide a range of benefits to consumers and society.