Proteases belong to the class of hydrolases, which degrade proteins into small peptides and amino acids by catalyzing the reaction involved addition of water to cleave the peptide bond. They are metabolically important and are believed to be the most primitive enzymes in the biological evolution. Their physiological functions are versatile and varied, both at cellular and organelle level. They show wide diversity with respect to their properties like substrate specificity, mechanism of action, involvement of amino acids in the active site, pH and temperature dependency for activity and stability. Proteases can broadly divided into two major groups i.e. exopeptidases and endopeptidases depending on their site of action. Further, they are classified on the basis of the reaction type they catalyzed, chemical nature of the active site and the structural evolutionary relationship they share. Although proteases are widespread in nature, microbes serve as a preferred source of these enzymes. Proteases from plant, animal and microbial sources account for about 60% of total enzyme sales. Current world demand for proteases has led to an interest in microbial proteases because of their rapid growth, cost effectiveness, and the ease with which they can be genetically modified to generate high yielding and desirable protease producing strains. Most of the commercial proteases, mainly neutral and alkaline are of bacterial origin and mostly obtained from Bacillus species. Fungi are known to secrete variety of hydrolytic enzymes, among them proteases is one of the important groups. Enzymes of fungal origin are advantageous due to the ease of biomass removal during downstream processing. With emphasis on environmental related issues, proteases are expected to replace chemicals used in the conventional methods in various industrial processes. Despite the systematic application of recombinant DNA technology and protein engineering to alter the properties of enzymes, search for proteases with novel properties from microbial biodiversity and their exploitation in newer fields still continues.