Organophosphates have been widely used as insecticides and chemical warfare agents. The health risks associated with these agents have necessitated the need for better detoxification and bioremediation tools. Bacterial enzymes capable of hydrolyzing the lethal organophosphate nerve agents are of special interest. Phosphotriesterase (PTE) isolated from the soil bacteria Pseudomonas diminuta displays a significant rate enhancement and substrate promiscuity for the hydrolysis of organophosphate triesters. Directed evolution and rational redesign of the active site of PTE have led to the identification of new variants with enhanced catalytic efficiency and stereoselectivity toward the hydrolysis of organophosphate neurotoxins. PTE has been utilized to protect against organophosphate poisoning in vivo. Biotechnological applications of PTE for detection and decontamination of insecticides and chemical warfare agents are developing into useful tools. In this review, the catalytic properties and potential applications of this remarkable enzyme are discussed.