Indonesia’s waste management system struggles to keep pace with rapid population growth and urbanization, resulting in inefficient waste collection, environmental degradation, and low recycling rates. The country predominantly relies on open dumping and landfilling, which contribute significantly to pollution and greenhouse gas emissions. This study explores the transformative role of Artificial Intelligence (AI) and the Internet of Things (IoT) in waste management, focusing on smart waste collection, automated sorting, real-time monitoring, and predictive analytics. AI-driven waste classification enhances recycling efficiency, while IoT-enabled smart bins optimize collection routes, reducing operational costs and landfill dependency. Despite these advantages, challenges such as high implementation costs, digital infrastructure limitations, and data privacy concerns hinder widespread adoption. This study highlights that policy support, investment in digital infrastructure, and stakeholder collaboration are crucial for successful implementation. By leveraging AI and IoT, Indonesia can significantly improve waste management efficiency, minimize environmental impact, and advance circular economy initiatives. The findings suggest that, with the right policies and investments, AI-driven waste management can drive sustainability, reduce waste mismanagement, and promote resource optimization, making it a vital strategy for future urban development in Indonesia.