Aluminum is produced from its primary bauxite ore through the Bayer process. Although Al is important nowadays in the development of humanity, its production leads to the generation of a huge amount of waste, called red mud. Globally, the estimation of the stock of red mud is about 4 billion tons, with about 10 million tons located in Turkey. The presence of rare-earth elements (REEs) in crucial materials such as red mud makes it a major source of these elements. A number of methods have been developed for treating red mud, which are employed globally to recover valuable products. The application of a suitable method for REE extraction from red mud is a way to overcome the supply risk, contributing to reducing the environmental issues linked to red mud pollution. The current review summarizes the research on red mud processing and examines the viability of recovering REEs from red mud sustainably, utilizing hydrometallurgy and biohydrometallurgy.