The potential contribution of decentralized approaches in implementing biowaste recovery systems has attracted interest in urban policy making and scientific research. Although the scientific literature on the topic is rapidly increasing, it is still limited and scattered. A comprehensive overview of current scientific knowledge is thus needed to support future research on decentralized options for biowaste recovery systems. Anaerobic digestion (AD) is a mature biowaste treatment technology that recovers energy and nutrients, and can close urban resource loops. Through a scoping literature review, this paper investigated decentralized AD and its potential contribution in implementing urban biowaste recovery systems. We identified opportunities and challenges for planning of decentralized AD, and concluded that these mainly concern: (a) digestate management; (b) the potential for local circularity with product valorization in outlets such as urban agriculture; and (c) the development and application of decision support tools. The findings highlighted the need to enhance scientific evidence on the impact of decentralized AD in different urban contexts. Results from published studies were highly context-specific, making it difficult to draw general conclusions. This study can support the transition to integrated planning of AD and wider urban biowaste recovery systems. Such planning must include a comprehensive analysis of configuration approaches.