Microbial transformation of hydrocarbons to methane is an environmentally relevant process taking place in a wide variety of electron acceptor-depleted habitats, from oil reservoirs and coal deposits to contaminated groundwater and deep sediments. Methanogenic hydrocarbon degradation is considered to be a major process in reservoir degradation and one of the main processes responsible for the formation of heavy oil deposits and oil sands. In the absence of external electron acceptors such as oxygen, nitrate, sulfate or Fe(III), fermentation and methanogenesis become the dominant microbial metabolisms. The major end product under these conditions is methane, and the only electron acceptor necessary to sustain the intermediate steps in this process is CO2, which is itself a net product of the overall reaction. We are summarizing the state of the art and recent advances in methanogenic hydrocarbon degradation research. Both the key microbial groups involved as well as metabolic pathways are described, and we discuss the novel insights into methanogenic hydrocarbon-degrading populations studied in laboratory as well as environmental systems enabled by novel cultivation-based and molecular approaches. Their possible implications on energy resources, bioremediation of contaminated sites, deep-biosphere research, and consequences for atmospheric composition and ultimately climate change are also addressed.