Waste management presents a major environmental and public health challenge, creating an urgent need for strategies that convert discarded materials into higher-value products. Waste-derived nanoparticles (WDNPs) have gained increasing attention because they integrate waste valorization with the production of functional nanomaterials for environmental, biomedical, agricultural, packaging, sensing, catalytic and energy-related applications. This review critically evaluates WDNP synthesis from five major waste streams, including agricultural residues, animal-derived waste, plastic waste, electronic waste and industrial by-products. Across these categories, precursor composition strongly influences nanoparticle size, morphology, surface chemistry, stability and functional performance, making feedstock selection and processing conditions central to reproducible production. Evidence from recent studies indicates that WDNPs have broad functional potential across environmental remediation, biomedical delivery, antimicrobial systems, sustainable packaging, agriculture, energy storage and catalysis. However, translation beyond laboratory-scale studies remains limited by feedstock variability, limited reproducibility, complex purification requirements, potential toxicity, insufficient standardization and limited pilot-scale validation. By comparing synthesis approaches, application outcomes and translational barriers across waste categories, this review provides a critical overview of the opportunities and limitations of WDNPs and identifies the key requirements for their responsible development within a circular-economy framework.