With the threat of ‘white pollution’, the large‐scale production and application of biodegradable plastics have become crucial. Poly‐3‐hydroxybutyrate (PHB) is the simplest and most used member of the polyhydroxyalkanoate family, with a uniform C4 structural unit (C4H6O2). To reduce the impact of PHB on waste treatment, various recycling strategies have been developed for the tailored conversion of PHB to targeted chemicals and fuels. Given the special structural unit, PHB and its plastic forms have the potential to serve as a sustainable feedstock for producing a series of value‐added chemicals and fuels, including (i) crotonic acid via pyrolysis, (ii) (R)‐β‐hydroxybutyric acid via hydrolysis, (iii) propylene via depolymerization and decarboxylation, (iv) liquid fuels via deoxygenation and oligomerization, (v) n‐biobutanol via catalytic hydrogenolysis, (vi) methyl crotonate via thermolysis and esterification, (vii) (R)‐3‐hydroxybutyrate methyl ester via catalytic methanolysis, and (viii) β‐aminobutyric acid via ammonolysis. This review article provides a systematic review focusing on the reaction pathways, primary applications and market potential of the target products, and the pros and cons of current bio‐refineries in comparison with conventional petroleum refineries. The thermochemical processes developed for PHB degradation and polypropylene (a typical petroleum‐derived plastic to be replaced by PHB) are also comprehensively evaluated to reveal the future opportunities and challenges of PHB's broad‐scale production and utilization. PHB‐derived chemicals and fuels have a mature market already, and it is confirmed that the tailored valorization of PHB is a promising pathway to expand the market and gain more environmental and energy benefits. © 2022 Society of Chemical Industry and John Wiley & Sons, Ltd.