Biodeposition of minerals is a widespread phenomenon in the biological world and is mediated by bacteria, fungi, protists, and plants. Calcium carbonate is one of those minerals that naturally precipitate as a by-product of microbial metabolic activities. Over recent years, microbially induced calcium carbonate precipitation (MICP) has been proposed as a potent solution to address many environmental and engineering issues. However, for being a viable alternative to conventional techniques as well as being financially and industrially competitive, various challenges need to be overcome. In this review, the detailed metabolic pathways, including ammonification of amino acids, dissimilatory reduction of nitrate, and urea degradation (ureolysis), along with the potent bacteria and the favorable conditions for precipitation of calcium carbonate, are explained. Moreover, this review highlights the potential environmental and engineering applications of MICP, including restoration of stones and concrete, improvement of soil properties, sand consolidation, bioremediation of contaminants, and carbon dioxide sequestration. The key research and development questions necessary for near future large-scale applications of this innovative technology are also discussed.