The growing concerns about climate changes and environmental pollution have galvanized considerable research efforts in recent years to develop effective and innovative remediation technologies for contaminated soils and water caused by industrial and domestic activities. In this context, the establishment of effective treatment methods for wastewater has been critically important and urgent, since water pollution can take place on a very large scale (e.g., oceanic oil spills) and have massive impacts on ecosystems and human lives. Functional materials play a central role in the advancement of these technologies due to their highly tunable properties and functions. This article focuses on reviewing the recent progress in the application of various functional materials for wastewater treatment. Our literature survey is first concentrated on new modification methods and outcomes for a range of functional materials which have been actively investigated in recent years, including biofilm carriers, sand filters, biomass, biopolymers, and functional inorganic materials. Apart from the development of modified functional materials, our literature survey also covers the technological applications of superhydrophilic/superhydrophobic meshes, hybrid membranes, and reusable sponges in oil–water separation. These devices have gained significantly enhanced performance by using new functional materials as the key components (e.g., coating materials), and are therefore highly useful for treatment of oily wastewater, such as contaminated water collected from an oil spill site or oil–water emulsions resulting from industrial pollution. Based on our state-of-the-art literature review, future directions in the development and application of functional materials for wastewater treatment are suggested.