The Lythraceae family includes henna (Lawsonia inermis), which thrives in subtropical and tropical climates. One of its many and long-standing uses is in cosmetics as a pigment to color hair and nails. Additionally, it serves as a disinfectant against microbiological infections and has traditional applications in the textile industry, specifically for coloring wool and nylon. The dried leaves of henna contain a significant amount of lawsone, an active substance bestowing them with staining abilities. Environmental biotechnology, a subfield of biotechnology, engages in the production of biomass or renewable energy sources and the elimination of pollutants, utilizing either entire organisms or their by-products. Recent research indicates that henna, owing to its sustainability, abundant production, simplicity of preparation, low cost, and reputation for being safe and ecologically benign, is exceptionally well-suited to participate in the realm of environmental biotechnology. This review navigates through the most recent studies exploring the use of henna and its extracts for related purposes. These encompass a spectrum of applications, including but not limited to nanobiotechnology, fabric dyeing, corrosion resistance, colored solar cells, carbon dots, and new renewable energy exemplified by biofuel and biohydrogen. Furthermore, henna extracts have been deployed to function as antimicrobials and ward off dangerous insects.