Vermicomposting, the bio-oxidative decomposition of organic waste using earthworms and microorganisms, offers an eco-friendly, low-cost, and sustainable approach for managing agro-waste. With escalating concerns over soil degradation, declining organic matter, and environmental pollution due to unscientific waste disposal, vermicomposting presents a viable alternative for transforming nutrient-poor residues into high-quality organic manure. Agro-wastes such as crop residues, fruit-vegetable peels, sugarcane bagasse, and animal dung can be efficiently converted into stabilized humus-rich compost through earthworm activity, improving soil fertility and structure while minimizing greenhouse gas emissions and groundwater contamination. The process enhances microbial diversity, enzymatic activity, and nutrient cycling in soils, thereby contributing to sustainable agricultural productivity. Moreover, vermicompost application restores the physical, chemical, and biological health of degraded soils and supports long-term ecological balance. Integrating vermicomposting within existing farming systems also promotes circular bioeconomy models by closing nutrient loops and reducing dependence on synthetic fertilizers. This chapter explores the principles, processes, and benefits of vermicomposting, with emphasis on its role in agro-waste valorization, soil restoration, and environmental health. It further highlights suitable earthworm species, operational parameters, and challenges in large-scale adoption, aiming to guide researchers, policymakers, and farmers in implementing sustainable organic waste management practices.