The environmental invasion of plastic waste leads to, among other things, a reassessment of natural fibers. Environmental pollution has shown the importance of the degradability, among other properties, of the raw materials used by the textile industry or other industrial fields. Wool seems to be a better raw material than the polymers that generate large quantities of micro- and nano-plastics, polluting the soil, water, and air. However, the usual processing of raw wool involves a number of chemically very polluting treatments. Thus, sustainable procedures for making wool processing environmentally friendly have been considered, leading to the reappraisal of wool as a suitable raw material. Besides their applications for textile products (including smart textiles), new directions for the valorization of this natural material have been developed. According to the recent literature, wool may be successfully used as a thermal and phonic insulator, fertilizer, or component for industrial devices, or in medical applications, etc. In addition, the wool protein α-keratin may be extracted and used for new biomaterials with many practical applications in various fields. This review makes a survey of the recent data in the literature concerning wool production, processing, and applications, emphasizing the environmental aspects and pointing to solutions generating sustainable development.