Dimethyl sulfide (DMS) is the most abundant form of volatile sulfur in Earth's oceans, and is mainly produced by the enzymatic clevage of dimethylsulfoniopropionate (DMSP). DMS and DMSP play important roles in driving the global sulfur cycle and may affect climate. DMSP is proposed to serve as an osmolyte, a grazing deterrent, a signaling molecule, an antioxidant, a cryoprotectant and/or as a sink for excess sulfur. It was long believed that only marine eukaryotes such as phytoplankton produce DMSP. However, we recently discovered that marine heterotrophic bacteria can also produce DMSP, making them a potentially important source of DMSP. At present, one prokaryotic and two eukaryotic DMSP synthesis enzymes have been identified. Marine heterotrophic bacteria are likely the major degraders of DMSP, using two known pathways: demethylation and cleavage. Many phytoplankton and some fungi can also cleave DMSP. So far seven different prokaryotic and one eukaryotic DMSP lyases have been identified. This review describes the global distribution pattern of DMSP and DMS, the known genes for biosynthesis and cleavage of DMSP, and the physiological and ecological functions of these important organosulfur molecules, which will improve understanding of the mechanisms of DMSP and DMS production and their roles in the environment.