The deposition of textile waste into landfill has reached an unsustainable level and raises serious environmental issues across the world. Transforming textile waste into fiber reinforcement in cementitious composites offers a sustainable resolution toward a circular textile economy. This article presents a comprehensive review of environmental concerns, recycling routes for textile waste, together with an in-depth review of the engineering properties of concrete incorporating recycled textiles. In general, the incorporation of these recycled fibers from textile waste enhances strain capacity, crack control, durability, and energy absorption of concrete via dual effects: bridging action (direct mechanism) and refinement of pore distribution (indirect effect). An improvement in compressive strength can be achieved by the utilization of a small dosage of recycled fibers or recycled fiber fabrics in concrete (strength < 40 MPa). Finally, the cost and environmental benefits for eco-efficient building application are also evaluated to draw the attention of researchers toward these potentially recyclable waste materials.