Carbon-based functional materials hold the key for solving global challenges in the areas of water scarcity and the energy crisis. Although carbon nanotubes (CNTs) and graphene have shown promising results in various fields of application, their high preparation cost and low production yield still dramatically hinder their wide practical applications. Therefore, there is an urgent call for preparing carbon-based functional materials from low-cost, abundant, and sustainable sources. Recent innovative strategies have been developed to convert various waste materials into valuable carbon-based functional materials. These waste-derived carbon-based functional materials have shown great potential in many applications, especially as sorbents for water remediation and electrodes for energy storage. Here, the research progress in the preparation of waste-derived carbon-based functional materials is summarized, along with their applications in water remediation and energy storage; challenges and future research directions in this emerging research field are also discussed.