The textile industry is one of the most important industries in the world, but it is also one of the largest wastewater generators responsible for water depletion and ecotoxicity due to the inefficient fixation of textile dyes in fabrics. Although various studies have focused on the physicochemical and biological treatments of wastewater, these processes can be expensive and/or not environmentally sustainable, mainly focusing on the degradation of dyes rather than their valorisation. Aiming at the circularity of textile industries, Aqueous Biphasic Systems (ABS) have been proposed as circular, cost-effective, and sustainable platforms for the recovery of textile dyes. Thus, an overview of the use of ABS in the extraction and concentration of textile dyes is provided in this study, along with the main aspects of the textile dyeing process, the types of dyes used, their fixation efficiency, textile effluent composition, and commonly studied treatment methods. Overall, this study allows us to understand the influence of dye characteristics and ABS phase-forming compounds on the recovery efficiency of dyes, demonstrating the advantages of using this type of system in the design of a circular and sustainable extraction platform for the recovery and concentration of these compounds, as well as identifying the necessary improvements to successfully implement ABS-based processes at an industrial scale.