Contamination of water sources with various organic and inorganic non-biodegradable pollutants is becoming a growing concern due to industrialization, urbanization, and the inefficiency of traditional wastewater treatment processes. Transition Metal Carbides/Nitrides (MXenes) are emerging as advanced nanomaterials of choice for treating contaminated water owing to their excellent conductivity, mechanical flexibility, high specific surface area, scalable production, rich surface functionalities, and layered morphology. MXenes have demonstrated enhanced ability to adsorb various organic and inorganic contaminants depending upon their surface terminal groups (-OH, -F, and -O) and interlayer spacing. Titanium carbide (Ti3C2Tx) is most researched to date due to its ease of processing and stability. Ti3C2Tx has shown excellent performance in absorbing heavy metal ions and radioactive heavy metals. This review summarizes state-of-the-art Ti3C2Tx synthesis, including selective etching techniques, optimization of the desired adsorption features (controlling surface functional groups, intercalation, sonication, and functionalization), and regeneration and adsorption mechanism to remove contaminants. Furthermore, the review also compares the adsorption performance of Ti3C2Tx with other commercial adsorbents (including chitosan, cellulose, biomass, and zeolites). Ti3C2Tx has been found to have an adsorption efficiency of more than 90% in most studies due to its layered structure, which makes the functional groups easily accessible, unique and novel compared to other conventional nanomaterials and adsorbents. The challenges, potential solutions, and prospects associated with the commercial development of Ti3C2Tx as adsorbents are also discussed. The review establishes a framework for future wastewater treatment research using MXenes to address the global problem of water scarcity.