This chapter explores the challenges and prospects of converting Municipal Solid Waste (MSW) into biofuels and chemicals, highlighting the technologies, their intricacies, and the potential of this renewable energy source. Despite the economic and environmental benefits, large-scale commercialization is still challenging because of several factors. These include high moisture content, compositional unpredictability, and the presence of toxic metals, which can hinder biofuel production. These issues, along with low quality and yield, further complicate the purification of biofuels. Furthermore, if waste is not correctly sorted, the economic and technological difficulties, such as high operating costs and the requirement for complex separation technologies, often outweigh the advantages. New technologies that have the potential to increase conversion efficiency and product quality include plasma gasification, anaerobic digestion, and so on. However, strong legislative backing, monetary rewards, and market mechanisms that encourage innovation and adoption are necessary for the effective commercialization of these technologies. Sustainable waste management also requires the integration of circular economy principles, which prioritize resource recovery, waste minimization, and byproduct valorization. The development of MSW conversion technologies and procedures depends on international collaboration, knowledge sharing, and community awareness and involvement. These initiatives can support the development of a waste management and renewable energy strategy that is more robust and sustainable. This chapter focuses on the recent technological developments, policy support, and community involvement required for overcoming the present obstacles and realizing the full potential of MSW as a valuable resource for the production of biofuel and chemicals.