Plastic waste accumulation poses a critical environmental challenge, while the road construction industry continues to rely heavily on energy intensive, non-renewable binders. Integrating waste plastics into asphalt offers a dual solution to these issues by enhancing pavement performance and promoting circular economy principles. This review provides a comprehensive and data-driven synthesis of global research on plastic-waste-modified asphalt (PWMA), covering six major plastic types and both wet- and dry-processing technologies. Unlike prior reviews, this study employs a systematic PRISMA-based selection framework to evaluate 42 peer-reviewed experimental studies from 2000 to 2024, quantitatively comparing rheological, mechanical, and environmental outcomes. The review identifies polymer bitumen compatibility mechanisms, microstructural interactions revealed through microscopy, and the role of pre-treatment processes (glycolysis and pyrolysis) in improving dispersion and stability. Life Cycle Assessment (LCA) data reveal 20–35% reductions in carbon emissions and 10–12% life cycle cost savings compared to conventional and SBS-modified asphalt. The review proposes a strategic roadmap addressing performance variability, microplastic emissions, and compatibility challenges. By integrating material science, sustainability assessment, and field implementation data, this review advances a novel multidisciplinary perspective on waste plastic valorization in road infrastructure, bridging the gap between laboratory research and policy-ready, scalable applications.