The integration of recycled plastics into smart packaging systems is an important intersection of sustainability and technological innovation in modern plastic waste valorization and packaging applications. This chapter examines the technical feasibility, challenges, and opportunities associated with utilizing post-consumer and post-industrial recycled plastic materials in active and intelligent packaging technologies. We discuss how recycled polymers can be effectively integrated into smart packaging systems while preserving functionality and regulatory compliance by thoroughly analyzing material qualities, production procedures, and performance requirements. Key challenges addressed include material consistency, barrier properties, and compatibility with embedded sensors and indicators. The chapter presents case studies of successful implementations across food, pharmaceutical, and consumer goods sectors, alongside lifecycle assessments quantifying environmental benefits. Regulatory frameworks, consumer acceptance factors, and market adoption strategies are evaluated to provide industry stakeholders with actionable insights. In addition to improving packaging functionality and consumer engagement in sustainable practices, the chapter suggests that recycled plastics can be used as substrates for smart packaging applications, providing a possible route toward achieving a circular economy.