This chapter describes the physiology and biochemistry of Acetic Acid Bacteria (AAB) relating to the growth and production of several valuable products. Eighteen genera in the family Acetobacteraceae are classified into the group of acetic acid bacteria (AAB). Generally, AAB can produce acetic acid from ethanol and widely inhabit in sugary or acidic substances in Nature and sometimes they are found as spoilers in alcoholic beverages. Ethanol oxidation is pronounced in Acetobacter and Komagataeibacter strains, while sugar oxidation is more efficient in Gluconobacter and Gluconacetobacter strains. The oxidation of ethanol is catalyzed by two membrane-bound enzymes located on the outer surface of the cytoplasmic membrane. Terminal oxidases in aerobic bacteria are classified into two major groups—heme–copper oxidases and bd-type oxidases. Aerobic bacteria generate energy from the respiratory chains that use molecular oxygen as the terminal electron acceptor and the process ends with the formation of water along with generation of proton gradient.