Layered double hydroxides (LDHs), also known as anionic clays, have attracted significant attention in energy and environmental applications due to their exceptional physicochemical properties. These materials possess a unique structure with surface hydroxyl groups, tunable properties, and high stability, making them highly desirable. In this review, the synthesis and functionalization of LDHs have been explored including co-precipitation and hydrothermal methods. Furthermore, extensive research on LDH application in toxic pollutant removal has shown that modifying or functionalizing LDHs using materials such as activated carbon, polymers, and inorganics is crucial for achieving efficient pollutant adsorption, improved cyclic performance, as well as effective catalytic oxidation of organics and photoreduction. This study offers a comprehensive overview of the progress made in the field of LDHs and LDH-based composites for water and wastewater treatment. It critically discusses and explains both direct and indirect synthesis and modification techniques, highlighting their advantages and disadvantages. Additionally, this review critically discusses and explains the potential of LDH-based composites as absorbents. Importantly, it focuses on the capability of LDH and LDH-based composites in heterogeneous catalysis, including the Fenton reaction, Fenton-like reactions, photocatalysis, and photoreduction, for the removal of organic dyes, organic micropollutants, and heavy metals. The mechanisms involved in pollutant removal, such as adsorption, electrostatic interaction, complexation, and degradation, are thoroughly explained. Finally, this study outlines future research directions in the field.