1,3-Propanediol, a valuable bifunctional molecule, can be produced from renewable resources using microorganisms. It has several promising properties for many synthetic reactions, particularly for polymer and cosmetic industries. By virtue of being a natural product, relevant biochemical pathways can be harnessed into fermentation processes to produce 1,3-propanediol. Various strategies for the microbial production of 1,3-propanediol are reviewed and compared in this article with their promises and constraints. Furthermore, genetic and metabolic engineering could significantly improve product yields and overcome the limitations of fermentation technology. Present review gives an overview on 1,3-propanediol production by wild and recombinant strains. It also attempts to encompass the various issues concerned in utilization of crude glycerol for 1,3-propanediol production, with particular emphasis laid on biodiesel industries. This review also summarizes the present state of strategies studied for the downstream processing and purification of biologically produced 1,3-propanediol. The future prospect of 1,3-propanediol and its potential as a major bulk chemical are discussed under the light of the current research.