The global generation of vast quantities of agricultural residues poses a significant environmental and logistical challenge. Composting offers an economically feasible and environmentally sustainable solution by efficiently transforming these waste materials into high-value organic fertilizers, thereby enhancing soil fertility and crop productivity. This chapter presents a comprehensive review of recent advances in the composting of agricultural residues, covering the entire process – from fundamental principles and microbial mechanisms to process optimization strategies and agricultural applications of the final compost product. It begins by addressing the challenges associated with the structural complexity and compositional heterogeneity of agricultural residues. Key composting principles, critical physicochemical parameters influencing process efficiency, and successional dynamics of microbial communities are then examined in detail. This chapter further evaluates various strategies to enhance composting performance, including pretreatment methods, co-composting, and integration of emerging additives such as biochar, metal oxides, and microbial inoculants. Special emphasis is placed on the agronomic benefits of mature compost, including its role in improving soil health, ensuring effective inactivation of pathogens and weed seeds, and supporting sustainable, long-term crop production. In summary, this review provides a robust theoretical and technological foundation for the effective valorization of agricultural residues into safe, nutrient-rich organic fertilizers, contributing to the advancement of circular agriculture and more sustainable agroecosystems.