The rapid growth of industrialization has led to the generation of large quantities of oily wastewater containing free oil, dispersed oil, emulsified oil, and dissolved hydrocarbons. Major sources include petroleum refineries, automobile service stations, metal finishing industries, and food processing units. If discharged without adequate treatment, oily wastewater causes severe environmental pollution by forming surface films on water bodies, reducing oxygen transfer, and adversely affecting aquatic ecosystems. Conventional treatment methods such as gravity separation, chemical coagulation, flotation, and membrane filtration often exhibit limitations including high capital and operating costs, excessive sludge generation, and reduced efficiency in treating stable oil–water emulsions. This project presents a comprehensive study on the adsorption method as an effective and sustainable approach for oily wastewater treatment. The performance of commonly used adsorbents, including activated carbon and low-cost bio-adsorbents such as rice husk ash and sawdust, is reviewed and analyzed. The influence of critical operating parameters such as pH, contact time, adsorbent dosage, temperature, and initial oil concentration on adsorption efficiency is discussed. Reported experimental investigations demonstrate that adsorption can achieve oil and grease removal efficiencies ranging from 85% to 95% under optimized conditions. The findings highlight that adsorption is a technically feasible, economical, and environmentally friendly tertiary treatment method, making it suitable for integration into industrial wastewater treatment systems.