Reclamation of treated wastewater is considered a viable option for reducing the agricultural and national water deficit, especially in Mediterranean-type and arid climatic conditions. Given that Chile is a country around 40% of whose territory is classified as semi-arid and desert and 20% as Mediterranean, with serious water scarcity problems, and which uses a great deal of the resource in agricultural irrigation, the present paper offers perspectives on the current state of treated wastewater reuse and considers challenges to improving the development of water reclamation for irrigation in Chile as a case study. The methods followed included a systematic literature review to answer two important questions: (a) What is the state of reclamation of treated wastewater for irrigation in Chile? and (b) What criteria/parameters determine the feasibility of reclaiming treated wastewater for irrigation in Chile? The results showed that Chile has been affected by climate change in a short time: a megadrought has occurred over the last ten years, increasing the necessity for the country to secure alternative water sources for irrigation. The country has advanced greatly in wastewater treatment coverage, achieving almost 100% in urban areas, with technologies that can produce quality water as a new water source for irrigation. However, the lack of regulations and limited frameworks could explain the low direct reuse at present—below 1% of total flow. Regarding challenges, the necessity of updates to Chile’s institutional and legal frameworks, besides the inclusion of rural communities and the study of emerging contaminants, will be discussed. By these means, it will be possible to more efficiently utilize recycled wastewater as a new source for irrigation in this country.