The global textile and apparel industry is undergoing a pivotal structural shift, positioned at the convergence of rapid economic growth and significant environmental and social disruption. Boosted by evolving consumer behaviors, intensified regulatory enforcement, and increasing resource constraints, the industry is transitioning toward a circular and low-carbon model. This in-depth review examines data and trends from 2024 to 2026 to assess the industry’s complex sustainability challenges. This study systematically analyzes data and trends from 2024 to 2026 to assess the industry’s multifaceted sustainability challenges. It presents a comprehensive review of environmental degradation, focusing on carbon and water footprints, the widespread contamination of aquatic ecosystems by microplastics, and the pronounced toxicity of per- and polyfluoroalkyl substances (PFAS). Concurrently, this study examines the significant occupational health and human rights vulnerabilities in major South Asian manufacturing hubs, which are further intensified by climate change and exploitative supply chain dynamics. Furthermore, the study assesses the effectiveness of emerging technological interventions, including blockchain-enabled traceability, advanced biochemical dyeing techniques, and next-generation biomaterials such as mycelium and bio-based polyamides. Finally, this review underscores the value–action gap in consumer purchasing behavior and the rapid expansion of the circular resale economy, offering strategic insights to better align industry practices with global ecological limits.