The pulp and paper industry generates huge amounts of solid and semi-solid waste, primarily in the form of sludge and fibrous residues, posing significant environmental and disposal challenges. This review provides a detailed overview of paper mill waste, emphasizing its physicochemical characteristics and the central role of microbial communities in degradation. Microorganisms, through diverse metabolic and enzymatic pathways, drive the breakdown of lignocellulosic materials such as cellulose, hemicellulose and lignin. Both abiotic and microbial degradation mechanisms are examined, with attention to key environmental factors- including temperature, pH, moisture and substrate composition- that influence the efficiency of biodegradation. The review also explores the advantages and limitations of microbial methods, highlighting the generation of valuable byproducts with potential environmental and commercial benefits. Further, it addresses the ecological and human health risks associated with improper paper waste disposal. This review concludes by evaluating current waste management and recycling approaches, while emphasizing strategies to enhance the efficiency and sustainability of paper waste biodegradation. Rooted in circular economy principles, it highlights the emerging role of microbial biotechnology in transforming paper mill waste into a resource of environmental and economic value and outlines key directions for future research.