It was generally believed that coal sources are not favorable as live-in habitats for microorganisms due to their recalcitrant chemical nature and negligible decomposition. However, accumulating evidence has revealed the presence of diverse microbial groups in coal environments and their significant metabolic role in coal biogeochemical dynamics and ecosystem functioning. The high oxygen content, organic fractions, and lignin-like structures of lower-rank coals may provide effective means for microbial attack, still representing a greatly unexplored frontier in microbiology. Coal degradation/conversion technology by native bacterial and fungal species has great potential in agricultural development, chemical industry production, and environmental rehabilitation. Furthermore, native microalgal species can offer a sustainable energy source and an excellent bioremediation strategy applicable to coal spill/seam waters. Additionally, the measures of the fate of the microbial community would serve as an indicator of restoration progress on post-coal-mining sites. This review puts forward a comprehensive vision of coal biodegradation and bioprocessing by microorganisms native to coal environments for determining their biotechnological potential and possible applications.