Melanin is one of the most widespread natural pigments, which can be derived from animals, plants, and microorganisms. As an amino acid derivative, natural melanin shows outstanding biosafety. Due to the distinct metabolic systems of the source organisms, there are variations in color, composition, and even properties, based on which assorted melanin subtypes are derived. When extracting a certain type of melanin, the extraction strategy will vary in accordance with the location and distribution of the diversified biological melanin. Although there are various extraction methods for natural melanin, there is no uniform norm, causing confusion in choosing the extraction method and formulating the extraction scheme, and it is not conducive to the reference and comparison between research results. Nevertheless, sustaining the equilibrium of the three essential factors, namely, the purpose, cost, and benefit, has proven to be the most challenging task of this process. On the contrary, excluding the wide range of sources, melanin is non-cytotoxic and possesses a series of excellent properties, such as anti-oxidation, UV light absorption, photothermal conversion, and metal chelation. These distinguished properties enable melanin to be widely used in various fields, such as materials, batteries, and the environment, especially in biomedicine. Categorical biomedical applications include drug delivery, anti-inflammation, photothermal therapy, medical imaging, etc. According to the main component of eumelanin, polydopamine is often used as a melanin for biomedical research and demonstrates many intrinsic advantages such as good biocompatibility, excellent photothermal conversion performance, adhesion, high chemical reactivity, and multiple drug release response mechanisms. However, the diversity of the structures and components of natural melanin endows its advantages, such as antioxidant properties, photothermal conversion ability, and metal ion chelation ability, which cannot be matched by synthetic melanin. Therefore, exploring and utilizing natural melanin is imperative for the development of synthetic melanin with superior efficiencies. However, because the original properties of natural melanin are incapable of entirely supporting its actual application, it is essential to modify natural melanin to meet the actual demand. Whereas, the current traditional extraction and detection technologies have not been able to meet the standards required for further exploration of natural melanin, and there are still many unknown issues should be solved. For instance, the potential property changes under strong acidic conditions which commonly adopted in natural melanin extraction. In addition, the existing purification methods cannot provide effective protection for natural components, resulting in the loss of active components in the extraction process. With the development of detection and analysis technology, the research on natural melanin will achieve a further breakthrough, which will drive the industrialization and diversification of synthetic melanin, thereby promoting progress in related fields. On account of the above research and the current industrial status of melanin, this review first introduces the melanin subtypes existing in nature and provides an insight into the conventional extraction methods of natural melanin and its classification into four categories according to their principles. Second, it summarizes the insoluble, antioxidant, and optical properties of melanin and introduces the corresponding modification methods, including the application of melanin in biomedicine in recent years. Finally, the research and industrial development of natural melanin are discussed. We hope to provide useful insight into the exploitation of natural melanin and pave the way for its potential applications.