Textile processing and manufacturing is a chemical and energy-intensive industry and is one of the most significant contributors to polluting the environment by various means and poses threats to living beings. The rapidly changing fashion behavior and unscrupulous consumption by the end users are making this situation further worsen. Thus, to address this catastrophe, all stakeholders of a textile supply chain should come up with sustainable practices in every stage of their activities so that they can grow as a sustainable industry. Meanwhile, textile industries around the globe have already started adopting numerous innovative technologies and sustainable practices while putting focus on implementing ethical manufacturing processes to keep energy consumption, resource depletion, and waste generation as low as possible. Among them, bio-processing and manufacturing of textile goods have become a premier choice within the textile industry, which effectively reduces carbon footprint, replaces traditional hazardous chemicals, and ultimately helps to diversify the supply chain and move forward for a cleaner manufacturing process. Herein, this chapter will showcase such novel practices and manufacturing techniques while critically explaining the ongoing challenges and shedding light on future opportunities.