Dual-function electrocatalytic and macroporous hollow-fiber cathodes are recently proposed as promising advanced material for maximizing the conversion of waste streams such as wastewater and waste CO2 to valuable resources (e.g., clean freshwater, energy, value-added chemicals) in microbial electrochemical systems. The first part of this progress report reviews recent developments in this type of cathode architecture for the simultaneous recovery of clean freshwater and energy from wastewater. Critical insights are provided on suitable materials for fabricating these cathodes, as well as addressing some challenges in the fabrication process with proposed strategies to overcome them. The second and complementary part of the progress report highlights how the unique features of this cathode architecture can solve one of the intrinsic bottlenecks (gas–liquid mass transfer limitation) in the application of microbial electrochemical systems for CO2 reduction to value-added products. Strategies to further improve the availability of CO2 to microbial catalysts on the cathode are proposed. The importance of understanding microbe–cathode interactions, as well as electron transfer mechanisms at the cathode–cell and cell–cell interface to better design dual-function macroporous hollow-fiber cathodes, is critically discussed with insights on how the choice of material is important in facilitating direct electron transfer versus mediated electron transfer.