Dye-containing effluent generated in textile industries is polluting and complex wastewater. It should be managed adequately before its final destination. The up-flow anaerobic blanket (UASB) reactor application is an ecofriendly and cost-competitive treatment. The present study briefly reviews the UASB application for dye-containing wastewater valorization. Bioenergy and clean-water production potential during dye-containing wastewater treatment are emphasized to promote resource recovery in textile industries. Hydraulic retention time (HRT), organic loading rate (OLR), pH, temperature, and hydraulic mixing influence sludge granulation, microbial activity, and dye removal. HRT and OLR ranges of 6–24 h and 1–12 kg m−3
of chemical oxygen demand (COD) at a mesophilic temperature (30–40 °C) are recommended for efficient treatment. In these conditions, efficiencies of color and COD of 50–97% and 60–90% are reported in bench-scale UASB studies. Complex dye structures can hinder biomineralization. Pretreatment may be necessary to reduce dye concentration. Carbon-source and redox mediators are added to the UASB reactor to expedite kinetic reactions. A biogas yield of 1.48–2.70 L d−1
in UASB, which treats dye-containing effluents, is documented. Cotreatment of dye wastewater and locally available substrate could increase biogas productivity in UASB reactors. Organic waste generated in the textile industry, such as dye sludge, cotton, and starch, is recommended to make cotreatment cost competitive. Bioenergy production and water reuse allow environmental and economic benefits. Studies on combined systems integrating UASB and membrane processes, such as ultrafiltration and nanofiltration, for the production of reusable water and pretreatment of wastewater and sludge for improvements in biogas production might realize the complete potential for resource recovery of UASB technology. UASB bioenergy usage for integrated treatment trains can reduce operating costs and assist process sustainability in the textile industry.