The assumptions of a circular economy and sustainable development emphasize the need to perceive wastewater as a valuable source of energy and raw materials. Microbial fuel cells (MFCs) offer a sustainable alternative, directly converting organic matter into electricity while minimizing sludge production and eliminating aeration needs. This makes MFC suitable for decentralized wastewater treatment and energy generation. This chapter explores MFC’s application in treating oily wastewater, a significant industrial byproduct. The ability of MFC to degrade hydrophobic compounds present in oily wastewater while generating electricity is highlighted. Furthermore, the innovative possibility of converting oily wastewater into MFC into valuable bioactive compounds such as biosurfactants is emphasized. The research results to date are promising and indicate that MFC technology can be realistically implemented on a high scale, but this is associated with challenges. Key areas for further work include reducing capital and operating costs, optimizing system design, and ensuring long-term, stable performance under real operating conditions. There is also the potential for integrating MFC with other wastewater treatment technologies, which can significantly increase the efficiency of the overall process. Future research should focus on developing cost-effective materials, robust designs, and conducting pilot studies to fully exploit the potential of MFC in recovering energy and valuable resources from oily wastewater.