The rapid increase in municipal, industrial, and agricultural wastes presents significant environmental and resource management challenges. Conventional treatment methods are often energy-intensive, generate excess sludge, and provide limited opportunities for resource recovery. Microbial fuel cells (MFCs) offer a sustainable alternative by simultaneously treating diverse wastes and producing bioenergy and biofuels, including electricity, hydrogen, methane, and other value-added products. Advances in electrode materials, such as carbon-based supports, nanomaterials, and conductive polymers, alongside optimized membranes and biocatalysts—including pure cultures, mixed consortia, and engineered microbes—have improved electron transfer, substrate utilization, and overall energy efficiency. Beyond energy generation, MFCs enable nutrient recovery, heavy metal biosorption, and resource recycling, aligning with circular economy principles and zero-waste strategies. Despite their promise, challenges remain in scalability, long-term stability, fouling, and economic feasibility, which limit large-scale adoption. Future developments focus on hybrid bioelectrochemical systems (MFC–MEC–AD), synthetic biology to enhance microbial performance, and digital/IoT integration for real-time monitoring and optimization. With continued material innovation, microbial engineering, and supportive policies, MFCs have the potential to transform conventional waste management into an energy-positive, resource-recovering platform, contributing significantly to sustainable development, circular economy objectives, and environmental protection.