Water scarcity in Libya constitutes a structural challenge threatening national development, as more than 95% of the country’s water resources originate from non-renewable aquifers and the Great Man-Made River project. Rapid population growth and urbanization have led to increasing wastewater generation, exceeding 1.4 million m³/day. However, less than 25% of this volume undergoes adequate treatment, and the potential for safe reuse remains largely untapped. This study assesses the performance of wastewater treatment plants (WWTPs) in Tripoli, Benghazi, and Misrata through a mixed-methods approach combining field sampling, laboratory analysis, and secondary data. A total of 120 influent and effluent samples were analyzed for Biochemical Oxygen Demand (BOD), Chemical Oxygen Demand (COD), Total Suspended Solids (TSS), Ammonia (NH₃-N), Nitrate (NO₃⁻), Phosphate (PO₄³⁻), and Fecal Coliforms. Results show removal efficiencies ranging between 70–90% for organic matter and suspended solids, yet nutrient removal (NH₃-N and PO₄³⁻) and microbial disinfection remain inadequate, with effluents often exceeding WHO and FAO reuse standards. Figures and tables illustrate treatment gaps across cities, highlighting risks of environmental degradation and limited opportunities for water reuse. The study concludes that wastewater treatment in Libya, while partially effective, falls short of international benchmarks. Advancing wastewater management requires upgrading infrastructure, adopting tertiary treatment technologies, enforcing regulatory frameworks, and integrating resource recovery to support a circular economy. Wastewater reuse should be prioritized as a strategic pillar for addressing water scarcity and enhancing sustainable development in Libya. These findings provide evidence-based recommendations for policymakers and plant operators to enhance wastewater reuse, mitigate environmental risks, and strengthen water sustainability in Libya.