In the context of a global economy, Small and Medium Enterprises (SMEs) play a pivotal role in driving sustainable entrepreneurship. This paper examines the definition, core characteristics, theoretical underpinnings, and critical success factors of sustainable entrepreneurship within SMEs. Central to this discourse are key success factors such as effective leadership, managerial competence, strategic planning, and innovation capacity. These elements collectively enhance SMEs’ resilience and adaptability, fostering long-term viability. Organizational culture, particularly visionary leadership and a learning-oriented environment, further amplifies sustainability outcomes. Managerial capabilities—specifically strategic decision-making, financial discipline, and resource efficiency—are emphasized as critical enablers of sustainable performance. However, SMEs often encounter multifaceted barriers that hinder sustainable initiatives, which may stem from internal constraints or external institutional and market pressures. Understanding the interplay between these barriers is essential for achieving strategic alignment with sustainability goals. The study also highlights key drivers of sustainable entrepreneurship and presents case study reviews that illustrate practical applications and successful models across different sectors. This integrated approach contributes to a more comprehensive framework for understanding and advancing sustainability in SMEs, offering valuable insights for practitioners, policymakers, and researchers alike.