With the growth of the world population and the improvement of living standards, the demand for global textiles has been increasing rapidly. Although natural fibers are affected by the development of synthetic fibers, wool still occupies a certain share in the textile industry and is one of the most indispensable materials. However, many postindustrial and post-consumer waste wool textiles will be produced. The conventional treatment method is landfill or incineration, which is not conducive to economic, environmental, and social development. To counter this problem, many measures and methods have been adapted for the reuse of waste resources. This article provides a review on waste wool recycling and summarizes two main directions for reuse. Waste wool can be used for thermal and sound insulation materials, reinforced composite materials, or adsorbent materials to purify contaminated water which rely on fiber properties. Keratin extracted from waste wool can be applied for the production of high-value products such as functional finishing agents, organic fertilizers, regenerated protein films/fibers, or smart wearable electronic devices. Meanwhile, future development trends and the demand of waste wool recycling are also discussed. Continuous research and exploration are still needed for effective management of waste wool resources and to turn them into useful and valuable materials or products.