2-Phenylethanol (2-PE), an important flavor and fragrance compound with a rose-like smell has been widely used in the cosmetics, perfume, and food industries. Traditional production of 2-PE was mainly through the extraction from plant materials or by chemical synthesis. However, the increasing demand of consumers for natural flavors cannot be met by these methods. Biological production of 2-PE has emerged to be an appealing solution due to an environmental friendly process and the definition of a “natural” product. In this review, we have comprehensively summarized the current status and perspectives for biological 2-PE production in terms of its advantages over classical chemical synthesis and extraction from natural plants. A comprehensive description of 2-PE synthetic pathways and global regulation mechanisms, strategies to increase 2-PE production, and the utilization of agro-industrial wastes as feedstocks has been systematically discussed. Furthermore, the application of in situ product removal techniques have also been highlighted.