Wastewater emissions from textile factories cause serious environmental problems. Manganese peroxidase (MnP) is an oxidoreductase with ligninolytic activity and is a promising biocatalyst for the biodegradation of hazardous environmental contaminants, and especially for dye wastewater decolorization. This article first summarizes the origin, crystal structure, and catalytic cycle of MnP, and then reviews the recent literature on its application to dye wastewater decolorization. In addition, the application of new technologies such as enzyme immobilization and genetic engineering that could improve the stability, durability, adaptability, and operating costs of the enzyme are highlighted. Finally, we discuss and propose future strategies to improve the performance of MnP-assisted dye decolorization in industrial applications.