Microbial fuel cells (MFC) are bio-catalyzed electrochemical hybrid systems which function by converting chemical energy to electrical energy through a cascade of redox reactions in the presence of biocatalyst. The research on MFC has been intensified in the last few years due to its inherent ability to produce sustainable energy from renewable organic waste. The current review depicts an overview on the fundamental operational mechanism of MFC encompassing electromotive force, electron delivery, electron transfer, losses encountered during operation, etc. The specific function of physical, biological and operational factors on the bioelectrogenic activity is elaborated. In addition, the strategies to regulate the process towards enhancing the performance of the system have been discussed. The potential applications of MFC for energy generation, waste remediation and value added product recovery have also been elaborated. © 2014 Elsevier Ltd.