China has the largest textile production and export in the world, with a massive amount of wastewater and related pollutants releasing. With an increasing concern to improve water quality, dyeing and finishing wastewater (DFW) requires better disposal or reclamation. In this review, the characteristics of wastewater in different natural and synthetic fiber production processes as well as the origins of their specific pollutants such as aniline, absorbable organic halogens (AOX), sulfide, hexavalent chromium and antimony were summarized. The discharge standards for DFW in China, have undergone complex evolution processes, which were discussed including the current standard, the revision detail and the one to be implemented. Furthermore, the current status of pollutant reduction in the textile industry, covering cleaner production and wastewater treatment, was targeted, in particular the state of the art of specific pollutant removal technologies and their feasibility of application for DFW treatment. Also, reclamation systems based on wastewater discharge characteristics and reclaimed water quality requirements were reviewed. Overall, the systematic solution of source reduction of wastewater and contaminants, coupled with subsequent treatment and recycling, is crucial for the sustainable development of the textile industry.