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Bioindication has become an indispensable part of water quality monitoring in most countries of the world, with the presence and abundance of bioindicator taxa, mostly multicellular eukaryotes, used for biotic indices. In contrast, microbes (bacteria, archaea and protists) are seldom used as bioindicators in routine assessments, although they have been recognized for their importance in environmental processes. Recently, the use of molecular methods has revealed unexpected diversity within known functional groups and novel metabolic pathways that are particularly important in energy and nutrient cycling. In various habitats, microbial communities respond to eutrophication, metals, and natural or anthropogenic organic pollutants through changes in diversity and function. In this review, we evaluated the common trends in these changes, documenting that they have value as bioindicators and can be used not only for monitoring but also for improving our understanding of the major processes in lotic and lentic environments. Current knowledge provides a solid foundation for exploiting microbial taxa, community structures and diversity, as well as functional genes, in novel monitoring programs. These microbial community measures can also be combined into biotic indices, improving the resolution of individual bioindicators. Here, we assess particular molecular approaches complemented by advanced bioinformatic analysis, as these are the most promising with respect to detailed bioindication value. We conclude that microbial community dynamics are a missing link important for our understanding of rapid changes in the structure and function of aquatic ecosystems, and should be addressed in the future environmental monitoring of freshwater ecosystems.