<p>This continuous discharge of poorly treated organic and inorganic effluents poses a significant environmental hazard, and there is a need to develop effective, sustainable wastewater treatment systems. Floating Treatment Wetlands (FTWs) have become an attractive nature-based treatment that utilizes the synergistic potential of aquatic plants and their microbial communities to treat industrial effluents. The mechanisms of degradation and removal of a wide range of organic and inorganic pollutants, including pesticides, herbicides, toxic metals, synthetic dyes, and other hazardous chemicals, are thoroughly discussed in this review. Although FTWs have significant ecological and economic benefits, obstacles remain due to the complexity of system design, maintenance, and long-term operational sustainability. Recent technological developments, including artificial biofilm carriers, hybrid fuel cell-integrated FTWs, and improvements in nanoformulation, are also discussed in the review to enhance treatment performance. This is the first review, as far as we know, to fully integrate organic- and inorganic-pollutant-specific degradation mechanisms, novel enhancement approaches, and the dual biological functions of plants and microbes in FTWs. The article addresses a significant gap in the literature and offers a holistic model for optimizing FTW systems, thereby advancing environmentally friendly wastewater management practices.</p>