Textile dye wastewater is a major global contributor to environmental pollution, characterized by complex physicochemical characteristics such as high stability, resistance to degradation, and potential toxicity. These effluents pose significant ecological risks, including aquatic toxicity, bioaccumulation, and the presence of carcinogenic and mutagenic compounds. This review critically synthesizes various treatment technologies, categorizing them into physicochemical, chemical, and biological methods, and highlights the limitations of conventional processes, such as high energy consumption and problematic sludge production. A core focus of this work is the comprehensive analysis of biological treatment approaches, particularly the enzyme-mediated degradation mechanisms involving oxidoreductases like azoreductases, laccases, and peroxidases. The review delves into the catalytic pathways of these enzymes and discusses the effectiveness of microbial systems (bacteria, fungi, yeast, and algae) in achieving high decolorization and mineralization efficiencies. By integrating recent data and comparative analyses of current research trends, this manuscript emphasizes the novelty of its mechanistic exploration and forward-looking perspective. It concludes by outlining critical research gaps and future directions, including the optimization of hybrid treatment systems, enzyme engineering, and the scaling of biotechnological processes for achieving sustainable, cost-effective, and complete textile dye wastewater remediation.