The cosmetic segment is a rapidly growing industry that has been challenged in recent years due to the origin and impact of its ingredients and manufacturing techniques. With a focus on reducing carbon dioxide emissions and improving the degradability of products, many conventional ingredients are being dismissed to meet more exigent regulations and consumer ethical demands. Biotechnology, and fermentation as the core technology, is a solution to support and drive more sustainable growth for the cosmetic industry. This review presents the latest research and development in fermentation applied to cosmetics and showcases multiple examples throughout all classes of ingredients: from functional compounds, such as oil and surfactants, to multi-faceted molecules with a wide spectrum of formulations and skin benefits derived from their emulsifying, antimicrobial or antioxidant properties. The bottlenecks associated with the commercialization of such ingredients, together with successful examples, are also discussed. The shift towards a bio-based beauty industry requires a combination of technical, regulatory and marketing efforts. Fermentation strategies to better utilize low-cost substrates and optimize microorganisms and processes will reduce overall costs, reducing the price gap with traditional methods of production. The testing, standardization and regulation of these new ingredients need to catch up with the fast research happening in the field. Finally, consumer communication is key to achieve a successful introduction of biotech ingredients in the market.