The last two decades had witnessed extensive investigation on bacterial degradation of carbazole, an N-heterocyclic aromatic hydrocarbon. Specifically, previous studies have reported the primary importance of angular dioxygenation, a novel type of oxygenation reaction, which facilitates mineralization of carbazole to intermediates of the TCA cycle. Proteobacteria and Actinobacteria are the predominant bacterial phyla implicated in this novel mode of dioxygenation, while anthranilic acid and catechol are the signature metabolites. Several studies have elucidated the degradative genes involved, the diversity of the car gene clusters and the unique organization of the car gene clusters in marine carbazole degraders. However, there is paucity of information regarding the environmental fate as well as industrial and medical importance of carbazole and its derivatives. In this review, attempt is made to harness this information to present a comprehensive outlook that not only focuses on carbazole biodegradation pathways, but also on its environmental fate as well as medical and industrial importance of carbazole and its derivatives.