Methane is considered as a next-generation carbon feedstock owing to the vast reserves of natural and shale gas. Methane can be converted to methanol by various methods, which in turn can be used as a starting chemical for the production of value-added chemicals using existing chemical conversion processes. Methane monooxygenase is the key enzyme that catalyzes the addition of oxygen to methane. Methanotrophic bacteria can transform methane to methanol by inhibiting methanol dehydrogenase. In this paper, we review the recent progress made on the biocatalytic conversion of methane to methanol as a key step for methane-based refinery systems and discuss future prospects for this technology.