The growing demand for efficient and sustainable wastewater treatment solutions in urban areas has positioned membrane bioreactors (MBRs) as a promising alternative to conventional treatment systems. This study explores the development, optimisation, and application of MBR technology for urban wastewater management. Combining biological degradation with membrane filtration, MBRs offer superior effluent quality, compact footprint, and the potential for water reuse, making them ideal for space-constrained urban settings. The research focuses on recent advances in membrane materials, fouling mitigation strategies, energy efficiency, and system integration with decentralised treatment frameworks. Researchers evaluate performance using pilot-scale and full-scale MBR systems, emphasising nutrient removal, sludge characteristics, operational stability, and lifecycle costs. The findings demonstrate that MBRs can significantly contribute to achieving circular water economy goals in urban environments, supporting environmental protection and resource recovery. The authors also discuss recommendations for policy and future research directions