Canthaxanthin (4, 4′-diketo-β, β′-carotene) is a keto-carotenoid with strong antioxidant activity but no provitamin A activity. Canthaxanthin has potential and promising applications in human health and nutrition. The intake of canthaxanthin has proved to potentiate immune responses, enhance gap junctional communication and protect against skeletal diseases, UV-induced skin damage and some cancers. Synthetic canthaxanthin dominates the world market but recently interest in natural sources of the pigment has increased substantially. The major biological sources of canthaxanthin include crustacean and crustacean extracts, fungi, bacteria, yeasts and microalgae. Currently, only a few mutant strains of the bacteria are being considered or already being exploited for the production of high-value canthaxanthin, including Brevibacterium sp KY-4313, Haloferax alexandrinus sp. nov. TM, Gordonia jacobaea MV-26, Dietzia natronolimnaea HS-1. The current review summarized and discussed the general properties, the medicinal applications, biosynthesis, and promising natural sources of canthaxanthin, as well as recent developments in the biotechnological production of canthaxanthin.