<p>The fashion goods consumption is on a constant rise leading to the accumulation of post-consumer textile waste (PCTW). This issue has garnered significant attention and there have been several attempts in reducing PCTW through textile recycling. Despite several innovations in the field; the textile recycling industry is facing severe challenges in its scalability; competitiveness with virgin materials’ cost and quality; high cost logistics; and manual sorting. Does the textile recycling industry still have a bright future or is it a dead end? In this review we discuss the challenges associated with recycling PCTW and present technological advancements that could potentially overcome these barriers. A collective approach to implement regenerative design, design for easy disassembly, use of renewable and environmentally benign materials by the clothing manufacturers and reduced consumption along with the wave of green consumerism can drive the textile industry to a sustainable future. The policymakers also play a significant role in the success of the textile recycling industry as legislations rewarding the circularity efforts are crucial to bringing sustainability in the future textile industry. Some of these efforts are extended producer responsibility (EPR) in the EU, landfills diversion in the USA and digital tagging and AI sorting to improve traceability and automation adapted by Germany.</p> Graphical Abstract <p></p>