The scarcity of freshwater has been recognized as one of the main challenges people must overcome in the 21st century. The adoption of an environmentally friendly, cost-effective, and energy-efficient membrane distillation (MD) process can mitigate the pollution caused by industrial and domestic wastes. MD is a thermally driven process based on vapor–liquid equilibrium, in which the separation process takes place throughout a microporous hydrophobic membrane. The present paper offers a comprehensive review of the state-of-the-art MD technology covering the MD applications in wastewater treatment. In addition, the important and sophisticated recent advances in MD technology from the perspectives of membrane characteristics and preparation, membrane configurations, membrane wetting, fouling, and renewable heat sources have been presented and discussed.