Water makes up most of the Earth, although just 0.3% is usable for people and animals. The huge oceans, icecaps, and other non-potable water resources make up the remaining 99.7%. Water quality has declined in recent decades due to pollution from population growth, industry, unplanned urbanization, and poor water management. The textile industry has significant global importance, although it also stands as a major contributor to wastewater generation, leading to water depletion and ecotoxicity. This issue arises from the extensive utilization of harmful chemicals, notably dyes. The main aim of this review article is to combine and assess the impacts of textile wastewater that contains dyes and chemicals, and to examine their potential consequences on human health, aquatic health, and the environment. Moreover, the dedicated section presents an in-depth review of various environmentally sustainable approaches for the management and treatment of wastewater in the textile industry. These approaches encompass bio adsorbents, biological methods, membrane technology, ion exchange, advanced oxidation processes, as well as physicochemical and biochemical processes. Furthermore, this study also evaluates the contemporary progressions in this particular domain, taking into account the corresponding advantages and disadvantages. Finally, this article highlights the significance of recovering and reusing dyes, alkalis, and electrolytes in wastewater treatment. Additionally, it emphasizes the necessity of performing technoeconomic analyses and life cycle assessments (LCA) on wastewater treatment plants.