Storage of waste tyres causes serious environmental pollution and health issues, especially when they are left untreated in stockpiles and landfills. Waste tyres could be subjected to pyrolysis and activation in order to produce activated carbon, which is an effective adsorbent, and can find various applications, such as for wastewater treatment, removal of metals and dyes, energy storage devices, electrode materials, etc. Activated carbon (AC) is a non-polar and non-graphite material having high porosity and excellent adsorption capabilities, making it one of the most frequently used adsorbents in various industries. It is normally produced from carbon-rich materials such as coal, coconut shells, waste tyres, biowaste, etc. The use of waste tyres for the production of AC is a sustainable alternative to conventional sources (such as coconut shells and coal) as it supports the concept of a circular economy. Since AC sourced from waste tyres is a new area, this study reviews the methods for the preparation of AC, the types of activation, the forms of activated carbon, and the factors affecting the adsorption process. This study also reviews various applications of AC derived from waste tyres, with a specific focus on the removal of different pollutants from wastewater. Activated carbon derived from the waste tyres was found to be a versatile and economically viable carbon material, which can contribute towards safeguarding the environment and human health.