The handicraft industry, rooted in rich cultural traditions, plays a vital role in preserving heritage, supporting local economies, and promoting sustainable livelihoods. However, as global markets evolve and environmental concerns intensify, the sector faces significant sustainability challenges. This paper, titled “From Tradition to Transformation: Exploring Sustainability Challenges in the Global Handicraft Industry,” examines the complexities artisans and stakeholders encounter while striving to balance tradition with modern sustainability demands. The study explores key issues such as resource depletion, environmental degradation, loss of traditional skills, market competition, and the growing need for eco-friendly production practices. It highlights how globalization, technological advancements, and shifting consumer preferences are both threats and opportunities for the sector. Using a mixed-methods approach involving secondary data analysis, field surveys, and case studies from diverse regions, the research identifies gaps in current sustainability efforts and suggests innovative models for promoting resilience within the industry. It emphasizes the importance of integrating traditional knowledge with modern sustainable technologies, policy interventions, fair trade practices, and community-based initiatives to create a viable future for handicrafts. Ultimately, the paper seeks to contribute to academic discourse and provide actionable insights for policymakers, artisans, entrepreneurs, and researchers dedicated to revitalizing the handicraft sector in a sustainable manner. By exploring the intersection of tradition, transformation, and sustainability, this study sheds light on the urgent need to reimagine and reengineer the global handicraft industry for long-term ecological and economic viability.