Bioconversion of organic waste using fly larvae (such as Hermetia illucens and Musca domestica) is often presented as a promising and sustainable alternative because of its ability to generate high economic value products from excreta, waste or low value-added materials in short term, with the potential to promote a circular economy in agricultural systems. However, bioconversion of some organic waste, such as animal manure, could limit the use of bioconversion products because of contaminants presents in the substrate, offering risks of toxic substances entering the food chain and consequent effects on human health and the environment. This review provides an overview of the limitations and potentials of bioconversion process of cattle, swine, and chicken manure using fly larvae, focusing on nutrient recycling, environmental impacts, direct greenhouse gas emissions, heavy metals, antibiotics, and pathogenic organisms. Potential advantages identified include the ability to reduce manure volume and nutrients, produce biofertilizer and high protein and fat content larval biomass, and reduce environmental impact compared to composting and other protein and oil production sources, as well as, to reduce some metals, antibiotics and pathogenic organisms found in manure. On the other hand, some metals, antibiotics, bacteria, and parasites may be retained or bioaccumulated in larval biomass. Direct use of larval biomass from bioconversion of animal waste, as animal feed, is not recommended, and biofertilizer requires additional treatment before release to agricultural soil, aiming to ensure food and environmental safety.