Natural pigments sourced from ores, insects, plants and animals were the colorants used since prehistoric period. Synthetic dyes which took the place of natural pigments in the middle of 19th century still rule the field to the maximum extent in spite of its hazardous effect to humans, animals and environment. As an alternative to synthetic pigments, bacterial pigments due to their better biodegradability and higher compatibility with the environment, offer promising avenues for various applications. The industry is now able to produce some bacterial pigments for applications in food, pharmaceuticals, cosmetics and textiles. Extraction of bacterial pigments in relatively pure and concentrated forms is the main technological challenge. Optimization of fermentation process and the medium components are reported as key strategies for economic recovery of pigments.