Urban and agricultural lignocellulosic waste poses challenges for waste management due to limited landfill capacity, inefficient disposal, environmental pollution, and greenhouse gas emissions. However, it offers resource recovery opportunities through composting, production of bioenergy, bioplastics manufacturing, and anaerobic digestion. These approaches of waste valorization enable waste reduction, support the circular economy, and promote the sustainable use of energy and materials. Resource recovery from lignocellulosic waste extracts valuable materials and energy, aiding waste diversion, sustainability, and resource conservation. Lignocellulosic waste is a renewable resource for bioplastic production, offering an eco-friendly alternative to fossil-based plastics. This approach encourages sustainable waste management by transforming agricultural and urban waste into valuable products. It also helps in decreasing environmental pollution, aligns with circular economy principles, and minimizes dependence on non-renewable resources. Bioplastics, being biodegradable or compostable, offer a sustainable alternative to traditional plastics, helping to mitigate plastic pollution, thus reducing the environmental impact associated with traditional plastic products. Lignocellulosic wastes, such as paper, cardboard, agricultural residues, yard waste, etc., are collected from households, businesses, agricultural fields, or industrial sources and serve as feedstocks for bioplastic production. They undergo microbial fermentation, in which particular bacteria or fungi transform cellulose and hemicellulose into biopolymers such as polylactic acid (PLA) or polyhydroxyalkanoates (PHAs). Alternatively, enzymatic hydrolysis can be used to decompose lignocellulosic biomass into sugars, which are subsequently polymerized to form bioplastics. Additionally, chemical processes can modify lignin, a major component of lignocellulose, to create bioplastics with enhanced properties. Several bacteria, viz., Cupriavidus necator, Escherichia coli, Bacillus subtilis, Pseudomonas putida, Clostridium spp., Rhodococcus spp., etc., have been reported to be capable of producing bioplastics using lignocellulosic substrate. This chapter provides a comprehensive overview of global lignocellulosic agricultural and municipal waste production and its valorization to support a circular economy. It highlights recent trends in bioplastic development from diverse lignocellulosic sources and examines the critical role of microbes in bioplastic production, including fermentation and enzymatic processes. Additionally, it addresses the current scenario of bioplastic production worldwide, showcasing innovative approaches and technologies. The chapter concludes with an exploration of the promising prospects for lignocellulosic bioplastics, emphasizing their potential to contribute to sustainable waste management and resource recovery within a circular economy framework.