Nitrite-dependent anaerobic methane oxidation (N-DAMO) refers to a process of microbial physiology that allows methane to be oxidised to carbon dioxide with nitrite as electron acceptor. Although current researches on N-DAMO focus mainly on its importance to artificial environments, more and more evidence becomes available indicating that N-DAMO bacteria distribute extensively in a variety of natural ecosystems, such as rivers, lakes, wetlands and marine ecosystems, and confirming that N-DAMO process occurs in several natural ecosystems, which demonstrates that the N-DAMO process as a previously overlooked methane sink may play an important role in reducing global methane emissions. This review presents an introduction to classification of N-DAMO bacteria and mechanisms of their biochemical reactions, a summary of distribution characteristics and effect intensity of N-DAMO bacteria in various natural ecosystems, and analyses of major environmental factors that may affect distribution and role of N-DAMO bacteria in various natural ecosystems. In addition, the review also explores potential importance of the N-DAMO process as an overlooked methane sink in controlling emission of greenhouse gases.