Agriculture significantly impacts the environment in terms of greenhouse gas emissions, soil nutrient depletion, water consumption, and pollution and waste produced by intensive farming. Wool has great potential and can be a valuable resource for agriculture due to its high nitrogen, carbon, and sulfur content and good water absorption and retention properties, benefiting soil carbon storage and fertility, as well as decreasing the risk of water contamination due to the slow decomposition and nitrogen release. This review aims to provide an overview of bio-based solutions that can benefit agroecosystems as a circular bioeconomy practice. Raw wool and wool hydrolysate are the most common applications, but also wool pellets, wool compost, and wool mats are interesting treatments for plant growing. Waste wool showed positive effects on soil fertility by primarily increasing nitrogen and sulfur content. Improved water retention capacity and microbial activity were also recorded in several studies. The use of wool as mulching is effective for weed control. Attention to the plant species tested aimed at identifying the most promising cultivations in terms of treatment efficiency, possibly lowering environmental impact on the agroecosystem. To eco-design and scale-up processes that strengthen the circular use of wool into widespread practices, further research should be encouraged in conjunction with environmental impact assessments and economic evaluations.