Textile waste is an important source of hazardous environmental waste. Landfills, effluents in water bodies, and air pollutants from incineration have a circular impact on the environment. This textile waste poses a huge social, economic, and ecological burden. Biotechnology has seen a surge in genetic manipulations, the production of novel metabolites, and the manufacturing of bio-based commercial agents for industries. Microbial biotechnology has offered vigorous bio-conversion of textile wastes, their bioaugmentation, and their valorization. Algae serve as effective agents for phycoremediation and biosorption. Enzymes from microbes and algae are employed in various steps of processing, manufacturing, and degrading the fibers. The use of natural fibers and their enzymatic processing cause lesser pressure on the environment. The advancement toward the creation of bio-based fibers competes with synthetic fibers. The treatment methods of textile effluents are a serious and pressing issue. Water resources, which govern life forces, become greatly contaminated. Conventional methods of waste management face limitations in the production cost of chemical remediation at the industrial level, optimization of degradation rates of treatment practices, complete replacement of synthetic fibers with natural fibers, and degradation of toxic contaminants. The limitations of conventional systems can be controlled by integrating management techniques that use microbial enzymes, microbes, microbial metabolites, and algae for the degradation and bioremediation of solid waste and textile effluents. The integration of omics-based state-of-the-art technology offers improvement within the biotechnological approaches.