Pharmaceutical compounds are typically produced in batch processes leading to the presence of a wide variety of products in wastewaters which are generated in different operations, wherein copious quantities of water are used for washing of solid cake, or extraction, or washing of equipment. The presence of pharmaceutical compounds in drinking water comes from two different sources: production processes of the pharmaceutical industry and common use of pharmaceutical compounds resulting in their presence in urban and farm wastewaters. The wastewaters generated in different processes in the manufacture of pharmaceuticals and drugs contain a wide variety of compounds. Further, reuse of water after removal of contaminants, whether pharmaceuticals or otherwise, is required by industry. In view of the scarcity of water resources, it is necessary to understand and develop methodologies for treatment of pharmaceutical wastewater as part of water management. In this review, the various sources of wastewaters in the pharmaceutical industry are identified and the best available technologies to remove them are critically evaluated. Effluent arising from different sectors of active pharmaceutical ingredients (API), bulk drugs, and related pharmaceutics, which use large quantities of water, is evaluated and strategies are proposed to recover to a large extent the valuable compounds, and finally the treatment of very dilute but detrimental wastewaters is discussed. No single technology can completely remove pharmaceuticals from wastewaters. The use of conventional treatment methods along with membrane reactors and advanced posttreatment methods resulting in a hybrid wastewater treatment technology appear to be the best. The recommendations provided in this analysis will prove useful for treatment of wastewater from the pharmaceutical industry.