SummaryPhytate formed during maturation of plant seeds and grains is a common constituent of plant‐derived fish feed. Phytate‐bound phosphorus (P) is not available to gastric or agastric fish. A major concern about the presence of phytate in the aquafeed is its negative effect on growth performance, nutrient and energy utilization, and mineral uptake. Bound phytate‐P, can be effectively converted to available‐P by phytase. During the last decade, phytase has been used by aqua feed industries to enhance the growth performance, nutrient utilization and bioavailability of macro and micro minerals in fish and also to reduce the P pollution into the aquatic environment. Phytase activity is highly dependent on the pH of the fish gut. Unlike mammals, fish are either gastric or agastric, and hence, the action of dietary phytase varies from species to species. In comparison to poultry and swine production, the use of phytase in fish feed is still in an unproven stage. This review discusses effects of phytate on fish, dephytinisation processes, phytase and pathway for phytate degradation, phytase production systems, mode of phytase application, bioefficacy of phytase, effects of phytase on growth performance, nutrient utilization and aquatic environment pollution, and optimum dosage of phytase in fish diets.