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A global rise in population and environmental degradation pose challenges to agricultural productivity worldwide, compelling the need for new strategies to tackle abiotic stress, pathogens, and other pests. Despite increasing crop yields, the Green Revolution has not achieved sustainable agriculture, largely due to indiscriminate use of chemical pesticides. Extensive use of synthetic pesticides elicits a persistent impact on the ecosystem, besides affecting the health of humans, animals, and other non-target beings. These considerations have mandated the need for alternative approaches such as the utilization of bio-pesticides, comprising biochemical pesticides, microbial pesticides, and plant-incorporated protectants, to preserve agriculture output, enhance plant growth, and compensate for the reduced use of synthetic pesticides. Bio-pesticides derived from microbial sources (viruses, bacteria, and fungi) are gaining much prominence due to their sustainability, non-toxic nature, and specific action against target species. Moreover, they are also non-pathogenic and have been shown to promote the growth of agricultural crops. Therefore, they are rendered as promising choices in integrated pest management where less dependency on chemical agents is desired. Up until now, several microbial biocontrol agents have been recognized, mass-produced, and effectively formulated for commercial availability as bio-pesticides. Additionally, a few have achieved dominant positions in the market. This review highlights the sources, mode of action, and formulation of microbial bio-pesticides and provides an insight into their associated merits in the agricultural sector. It also emphasizes the commercialization and global market potential of microbial bio-control agents, paving the way for sustainable agriculture.