The global plastic crisis has generated significant interest in repurposing waste plastics as asphalt modifiers, presenting both environmental and engineering advantages. This study offers a comprehensive review of the applications of waste plastics in asphalt, focusing on their types, modification mechanisms, incorporation techniques, and environmental impacts, alongside proposed mitigation strategies. Commonly utilized plastics include polyethylene (PE), polypropylene (PP), polystyrene (PS), polyvinyl chloride (PVC), and polyethylene terephthalate (PET), each affecting asphalt performance differently-enhancing high-temperature stability and fatigue resistance while exhibiting varying levels of compatibility and environmental risks. The incorporation techniques, namely wet and dry processes, differ in terms of efficiency, cost, and environmental footprint: the wet process enhances durability but requires more energy, whereas the dry process is more cost-effective but may lead to uneven dispersion. Environmental concerns associated with these practices include toxic emissions (such as polycyclic aromatic hydrocarbons and volatile organic compounds) during production, microplastic generation through abrasion and weathering, and ecological contamination of soil and water. Mitigation strategies encompass optimizing plastic selection, improving pre-treatment and compatibilization methods, controlling high-temperature processing, and monitoring the spread of microplastics. This review highlights the need for balanced adoption of waste plastic-modified asphalt, emphasizing sustainable practices to maximize benefits while minimizing risks.