Over the last decade, the occurrence of micropollutants in the environment has become a worldwide issue of increasing concern. Compound-specific stable-isotope analysis (CSIA) of natural isotopic abundance may greatly enhance the evaluation of sources and transformation processes of micropollutants, such as pesticides, personal care products or pharmaceuticals. We summarize recent advances from laboratory studies, review current limitations and analytical challenges associated with low concentrations and high polarity of micropollutants, and delineate the potential of micropolluant CSIA for field applications. We highlight future challenges and prospects regarding source apportionment, identification of biotic and abiotic transformation reactions on a mechanistic level, as well as integrative evaluation of degradation hot spots on the catchment scale. Such advances may feed into a framework for risk assessment of micropollutants that includes CSIA.