The synthesis of hydroxy fatty acids (HFAs) from the renewable oil feedstock by addition of water to C=C bonds have attracted great attention in recent years. Considering that selective asymmetric hydration of (non-activated) C=C bonds has been proven difficult to achieve with chemical catalysts, enzymatic catalysis by fatty acid hydratases (FAHs) present an attractive alternative route to produce value-added products in a highly regio- and enantiospecific fashion with excellent atom economy. Even though FAHs have just been investigated as a potential biocatalyst for a decade, remarkable information about FAHs in different aspects is available; however, a comprehensive review has not been archived. Herein, we summarize the research progresses on biochemical characterization, structural and mechanistic determination, enzyme engineering, as well as biotechnological application of FAHs. The current challenges and opportunities for an efficient utilization of FAHs in organic synthesis and industrial applications are critically discussed.