Phenolic acids are secondary metabolites that are widely distributed in plant tissues and closely associated with plant growth. In recent decades, phenolic acids have been studied and knowledge of them has grown internationally, but the functions of phenolic acids in the fields of biology, ecology, and agriculture are still unclear. In natural and agro-ecosystems, phenolic acids could be released into the external environment in a variety of ways. As research on the roles of phenolic acids as allelochemicals has increased, it has been found that the effectiveness of their allelopathic activities mainly depends on its existing state and specific concentration in vitro. At present, both the ecological and economic problems caused by phenolic acids are attracting more attention from scholars; problems such as the weakening of ecosystem regenerative capacity, restraint of plant growth, soil microflora imbalances, soil fertility decay, decrease in crop yield and increased rates of plant diseases and insect pests. Effective measures for resisting the potential environmental impacts resulting from phenolic acids in natural and agro-ecosystems are urgently needed. Microorganisms are regarded as important decomposers of pollutants in the natural environment so it is important to screen for suitable microorganisms that play an important role in the degradation of phenolic acids and in relieving the negative influences resulting from phenolic acids produced by plants. This can be done under pure culture or field conditions. In addition, it has been found that applying varieties of selected microorganisms can have a positive effect on crop growth environments. Therefore, it is necessary to further explore the degradation mechanisms of phenolic acids by microorganisms and understand the steps, and the regulatory role, of key enzymes and genes during this process. Meanwhile, scientists also need to clarify the mechanisms of degradation of different phenolic acids by specific microorganisms at the molecular level, and create environmentally friendly strains that have the function of efficient degradation of phenolic acids in ecosystems. It is also necessary to explore how the functional microorganisms relieve allelopathic autotoxicity caused by phenolic acids under complex ecological environments. This includes phenomena such as the concentration of effective allelochemicals directly reduced by highly efficient degradation and transformation of functional microorganisms, degradation of phenolic acids together with other environmental microorganisms, or comprehensive regulation of the activity and resistance of ecosystems to reducing the problems caused by phenolic acids in crops. We suggest that microorganisms play an important role in sustainable agricultural development and environmental protection. In addition, the diverse structures and functions of phenolic acids can be used to develop, and use, natural ecological reagents considered to be efficient and pollution free ecological pesticides. Hence, further comprehensive understanding of these biological molecules will contribute to maintenance and protection of whole ecosystems. In this review, the major sources and allelopathy of phenolic acids are introduced, and phenolic acid degradation mechanisms, metabolic pathways, and the corresponding studies of this at a molecular level are expounded. The current problems with the study of phenolic acid allelochemicals are also proposed. Finally, the trends and prospects in this field of research are also discussed.