Today, the textile sector is one of the largest economic sectors globally in terms of production amount, labor employment, and gross domestic product. At the same time, it is also one of the least sustainable sectors due to its profound negative environmental and social impacts. In the absence of a single legislative body at the global level, as well as a lack of global inter-governmental cooperation, there is also no unified legislation regarding the sustainability of the textile sector. However, the Earth is a single interconnected ecosystem; therefore, the responsibility for mitigating the negative consequences must be shared. The transition of the textile sector to a sustainable model requires a complete transformation of perception and behavior patterns at the governance, industry, and consumption levels. This research contributes to the existing literature about the social, environmental, and economic assessment of the textile sector focusing on the sustainability challenges in all three domains; furthermore, the paper provides a broad overview of existing and planned global and regional policies, regulations, and initiatives related to the transition of the textile industry to a sustainable development model.