The increasing generation of organic waste, largely driven by population growth and urban expansion, presents substantial environmental challenges, such as land contamination, greenhouse gas emissions and the depletion of landfill space. Vermicomposting emerges as an eco-friendly and sustainable waste management strategy, converting organic waste into nutrient-rich compost through the biological actions of earthworms. This chapter examines the foundational principles, processes and advantages of vermicomposting as a circular economy paradigm for sustainable waste management. Initially, the chapter provides an overview of organic waste sources and their environmental repercussions, then proceeds to a detailed description of the vermicomposting process. This includes selecting appropriate earthworm species, preparing feedstock and optimizing environmental conditions. It highlights key benefits, such as enhanced soil fertility, decreased dependence on chemical fertilizers and alleviation of waste management challenges. Moreover, the chapter rigorously analyses obstacles to large-scale adoption of vermicomposting, such as inconsistent feedstock quality, pathogen control and necessary infrastructure. It also discusses recent advancements, such as the use of bioengineered earthworms, integration with other waste management technologies and the potential applications in both urban and rural environments. To illustrate its scalability and economic feasibility, real-world case studies are featured throughout the chapter. In conclusion, it underscores the importance of policies, awareness initiatives and public–private partnerships in establishing vermicomposting as a fundamental aspect of sustainable waste management practices. By fostering circular resource utilization and minimizing environmental footprints, vermicomposting symbolizes a transformative solution to global waste management challenges while promoting agricultural productivity and ecological harmony.