One-carbon (C1) compounds have emerged as a key research focus due to the growth of metabolic engineering and synthetic biology as affordable and sustainable nonfood sugar feedstocks for energy-efficient and environmentally friendly biomanufacturing. This paper summarizes and discusses current developments in C1 compounds for biomanufacturing. First, two primary groups of microbes that use C1 compounds (native and synthetic) are introduced, and the traits, categorization, and functions of C1 microbes are summarized. Second, engineering strategies for C1 utilization are compiled and reviewed, including reconstruction of C1-utilization pathway, enzyme engineering, cofactor engineering, genome-scale modeling, and adaptive laboratory evolution. Third, a review of C1 compounds' uses in the synthesis of biofuels and high-value compounds is presented. Finally, potential obstacles to C1-based biomanufacturing are highlighted along with future research initiatives.