The evolution of textiles is increasingly driven by the need to balance advanced functionality with environmental responsibility. Smart and eco-friendly textiles combine responsive features such as thermal regulation, moisture control, and electronic conductivity with sustainability principles. These materials are designed using approaches like green chemistry, renewable and bio-derived fibers, and energy-efficient processing methods while addressing recyclability and end-of-life management. By integrating digital tools such as IoT, data analytics, and automated manufacturing, these textiles hold promise for applications in healthcare, protective clothing, sportswear, fashion, and environmental monitoring. Their development signals a pathway toward a more sustainable textile industry.