Vermicomposting is a process in which earthworms are used to convert organic materials into humus-like material known as vermicompost. A number of researchers throughout the world have found that the nutrient profile in vermicompost is generally higher than traditional compost. In fact, vermicompost can enhance soil fertility physically, chemically and biologically. Physically, vermicompost-treated soil has better aeration, porosity, bulk density and water retention. Chemical properties such as pH, electrical conductivity and organic matter content are also improved for better crop yield. Nevertheless, enhanced plant growth could not be satisfactorily explained by improvements in the nutrient content of the soil, which means that other plant growth-influencing materials are available in vermicomposts. Although vermicomposts have been shown to improve plant growth significantly, the application of vermicomposts at high concentrations could impede growth due to the high concentrations of soluble salts available in vermicomposts. Therefore, vermicomposts should be applied at moderate concentrations in order to obtain maximum plant yield. This review paper discusses in detail the effects of vermicompost on soil fertility physically, chemically and biologically. Future prospects and economy on the use of organic fertilizers in the agricultural sector are also examined.