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Polylactic acid (PLA) is a biodegradable polymer synthesized from renewable feedstocks such as corn starch, sugarcane, and cassava, presenting a sustainable alternative to conventional petroleum-based plastics worldwide. Global plastic pollution, particularly from single-use plastics, has driven increasing interest in PLA, with national policies and international initiatives aiming to reduce plastic waste and greenhouse gas emissions. PLA production offers notable environmental benefits, including 25–55% lower energy consumption and up to 70% fewer greenhouse gas emissions compared to traditional plastics. Despite these advantages, PLA faces technical challenges such as low thermal stability (~60°C), brittleness, and limited gas barrier properties. Recent innovations—such as nanofiller incorporation and stereocomplex PLA with enhanced thermal resistance exceeding 230°C—have addressed many of these limitations. The global PLA production capacity reached approximately 1 million metric tons per year and is projected to exceed 3 million tons by 2030, driven by advances in cost-effective raw materials, enzymatic recycling technologies, and hybrid bioplastic systems. This review systematically explores the current status, technological challenges, and strategic policy measures supporting PLA adoption globally, emphasizing the importance of innovation, circular economy approaches, and multi-stakeholder collaboration to realize PLA’s full potential as a cornerstone of sustainable material development.