Methanol is one of the building blocks in the chemical industry and can be synthesized either from petrochemical or renewable resources, such as biogas. Bioprocess technology with methylotrophic bacteria is well established, as illustrated by large-scale single-cell protein production in the past. During recent years, the first genomes of methylotrophs have been sequenced and significant progress in elucidating their metabolism has been made. In addition, the tool set for genetic engineering of methylotrophic bacteria has expanded greatly and strategies to produce fine and bulk chemicals with methylotrophs have been described. This review highlights the potential of these bacteria for the development of economically competitive bioprocesses based on methanol as an alternative carbon source, bringing together biological, technical and economic considerations.