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Lignin is a major component of soil organic matter and also a rich source of carbon dioxide in soils. However, because of its complex structure and recalcitrant nature, lignin degradation is a major challenge. Efforts have been made from time to time to understand the lignin polymeric structure better and develop simpler, economical, and bio-friendly methods of degradation. Certain enzymes from specialized bacteria and fungi have been identified by researchers that can metabolize lignin and enable utilization of lignin-derived carbon sources. In this review, we attempt to provide an overview of the complexity of lignin’s polymeric structure, its distribution in forest soils, and its chemical nature. Herein, we focus on lignin biodegradation by various microorganism, fungi and bacteria present in plant biomass and soils that are capable of producing ligninolytic enzymes such as lignin peroxidase (LiP), manganese peroxidase (MnP), versatile peroxidase (VP), and dye-decolorizing peroxidase (DyP). The relevant and recent reports have been included in this review.