The reuse of wastewater is becoming increasingly common as pressure on the world’s water resources intensifies. The environmental benefits of wastewater reuse can be substantial, and are a major driver for the practice. Nonetheless, if not carefully planned, the reuse of wastewater can pose significant threats to natural and human environments. The challenge facing natural resource managers is to identify potential benefits and risks and to achieve an appropriate balance. This paper describes, largely through examples from our research in Australia and China, environmental benefits and threats concomitant with reuse, and recent progress on risk assessment and mitigation.