Forward osmosis (FO) has attracted special attention in water and wastewater treatment due to its role in addressing the challenges of water scarcity and contamination. The presence of emerging contaminants in water sources raises concerns regarding their environmental and public health impacts. Conventional wastewater treatment methods cannot effectively remove these contaminants; thus, innovative approaches are required. FO membranes offer a promising solution for wastewater treatment and removal of the contaminants in wastewater. Several factors influence the performance of FO processes, including concentration polarization, membrane fouling, draw solute selection, and reverse salt flux. Therefore, understanding and optimizing these factors are crucial aspects for improving the efficiency and sustainability of the FO process. This review stresses the need for research to explore the potential and challenges of FO membranes to meet municipal wastewater treatment requirements, to optimize the process, to reduce energy consumption, and to promote scalability for potential industrial applications. In conclusion, FO shows promising performance for wastewater treatment, dealing with emerging pollutants and contributing to sustainable practices. By improving the FO process and addressing its challenges, we could contribute to improve the availability of water resources amid the global water scarcity concerns, as well as contribute to the circular economy.