The excessive discharge and accumulation of solid organic waste into the environment is of severe concern across the globe. Thus, an efficient waste management system is important to mitigate health risks to humans, minimize harmful impacts on the environment, and ensure a sustainable ecosystem. The organic waste is converted into value-added products either using microorganisms or heat energy; these methods are commonly known as biochemical and thermochemical techniques. The biochemical process has the advantage of higher selectivity of the products and lower processing temperatures. The principal conversion processes of this category are fermentation and anaerobic digestion (AD). This review article focuses on AD, a potential method for treating organic waste and creating a variety of products with added value. Here we present the digestibility of various organic wastes, the role of microorganisms, the decomposition process, co-substrates, digester designs, biogas yields, by-products, environmental impacts, and overall techno-economical effectiveness of the process. Further, this review offers insights into new directions for AD for waste treatment and future research without compromising the overall feasibility and environmental sustainability.