Incineration has gained popularity over landfill as a key solution for the reduction of massively increasing volumes of municipal solid waste (MSW) generation worldwide and in particular China. However, it is not the end solution. The disposal of the incineration residues, which are enriched with a wide range of heavy metals and soluble salts, has become a challenge for the environmental managers. The aim of this study was to review the increasing urbanization and its repercussion on waste generation in China; waste management options were compared for possible environmentally friendly considerations. Treatment techniques of incineration fly ash were discussed to determine the effectiveness of obtaining environmentally stable material, and, finally, possible applications of incineration fly ash for utilization were discussed based on identifying the processing suitability, performance and environmental impact of incineration fly ash for its applications.