In recent years, using modern technologies, researchers have harnessed the potential of yeast species for various industrial uses, such as the bioproduction of biopharmaceuticals, food additives, industrial biocatalysts, and biofuels. To improve the efficiency and potential of yeast species for industrial uses, genetic modification is carried out. Various genome engineering techniques, including Cre-loxP, homing endonucleases, zinc finger nucleases (ZFNs), transcription activator-like effector nucleases (TALENs), and clustered regularly interspaced short palindromic repeats/CRISPR-associated protein 9 (CRISPR/Cas9), have been employed by different research groups for the genetic manipulation of yeast species. Among different genome engineering techniques, CRISPR/Cas9 has become popular because of its precise editing at targeted loci with increased efficiency. The ease of use, effectiveness, and adaptability of CRISPR/Cas9 make multiplexing possible for simultaneously targeting multiple genes, which was earlier very challenging through traditional methods. Moreover, the ability to perform marker-free editing is the significant advantage offered by CRISPR/Cas9. This review focuses on the applications of the CRISPR/Cas9 system in both conventional and non-conventional yeast species. Further, we discussed the advancements of CRISPR/Cas9, including the regulation of gene transcription-activation/repression and other genome engineering aspects. Additionally, innovations in CRISPR/Cas9, such as cloning-free CRISPR/Cas9 assembly, CRISPR-targeted in vivo editing (ACtive), CRISPR/Cas9-induced gene conversion, and selective ploidy ablation (CRI-SPA) are also discussed for enhancing the potential applications of CRISPR/Cas9 in diverse yeast species.