The release of colored wastewater represents a serious environmental problem and public health concern. Color removal from textile wastewater has become a big challenge over the last decades, and up to now, there is no single and economically attractive treatment method that can effectively decolorize the wastewater. Effluents from textile manufacturing, dyeing, and finishing processes contain high concentrations of biologically difficult-to-degrade or even inert auxiliaries, chemicals like acids, waxes, fats, salts, binders, thickeners, urea, surfactants, reducing agents, etc. The various chemicals such as biocides and stain repellents used for brightening, sequestering, anticreasing, sizing, softening, and wetting of the yarn or fabric are also present in wastewater. Therefore, the textile wastewater needs environmental friendly, effective treatment process. This paper provides a critical review on the current technology available for decolorization and degradation of textile wastewater and also suggests effective and economically attractive alternatives.