Microbial water quality is of vital importance for human, animal, and environmental health. Notably, pathogenically contaminated water can result in serious health problems, such as waterborne outbreaks, which have caused huge economic and social losses. In this context, the prompt detection of microbial contamination becomes essential to enable early warning and timely reaction with proper interventions. Recently, molecular diagnostics have been increasingly employed for the rapid and robust assessment of microbial water quality implicated by various microbial pollutants, e.g., waterborne pathogens and antibiotic-resistance genes (ARGs), imposing the most critical health threats to humans and the environment. Continuous technological advances have led to constant improvements and expansions of molecular methods, such as conventional end-point PCR, DNA microarray, real-time quantitative PCR (qPCR), multiplex qPCR (mqPCR), loop-mediated isothermal amplification (LAMP), digital droplet PCR (ddPCR), and high-throughput next-generation DNA sequencing (HT-NGS). These state-of-the-art molecular approaches largely facilitate the surveillance of microbial water quality in diverse aquatic systems and wastewater. This review provides an up-to-date overview of the advancement of the key molecular tools frequently employed for microbial water quality assessment, with future perspectives on their applications.