Extreme fossil fuel consumption results in increasing the emanation of carbon dioxide (CO2) in the atmosphere and fosters ecocrisis. The CO2 electrocatalytic reduction has together functioned of deteriorating the concentration of greenhouse gas and transforming it into useful products. The research on low-cost, efficient and stable catalysts has gained great attention due to the fundamental CO2 chemical inertness. Single-atom catalysts (SACs) have a lot of potential in terms of maximal atomic efficiency, CO2 reduction activity, selectivity, and stability making them good candidates for next-generation catalyst development. In spite of significant attempts to create diverse single-atom active sites, the resulting catalysts' performance remains poor. Fortuitously, SAC activity and selectivity for CO2 removal can be improved through microenvironment modulation. In the current review, first, the fabrication methods of SACs, characterization technologies and reaction mechanism pathway of CO2 reduction on SACs are described. Additionally, new developments in the tuning of SACs microenvironment are thoroughly summarized in detail, for enhancing the CO2 reduction activity and selectivity. Finally, future directions of CO2 reduction on SACs and other analogous techniques are highlighted by giving perspectives on lasting obstacles of SACs and newfound microenvironment engineering.