Melanin is an amorphous polymer made of heterogeneous functional groups synthesized by diverse organisms including fungi, bacteria, animals, and plants. It was widely acknowledged for its biological processes and its key role in the protection of organisms from environmental stress. Recently, melanin clutches attention in the field of nanobiotechnology, drug delivery, organic semiconductors and bioelectronics, environmental bioremediation, photoprotection, etc., Furthermore, melanin from natural sources like microbial community shows antimicrobial, fighting cancer, radical scavenging, cosmeceuticals, and many therapeutic areas as well. Though the multipotentiality nature of melanin has been put forth, real-world applications still flag fall behind, which might be anticipated to the inadequate and high price essence of natural melanin. However, current bioprocess technologies have paved for the large-scale or industrial production of microbial melanin, which could help in the replacement of synthetic melanin. Thus, this review emphasizes the various sources for melanin, i.e., types-based on its pathways and its chemical structures, functional efficiency, physical properties, and conventional and modern methods of both extraction and characterization. Moreover, an outlook on how it works in the field of medicine, bioremediation, and other related areas provides perspectives on the complete exploitation of melanin in practical applications of medicine and the environment.