Currently, the biological wastewater treatment has been challenged by their high energy consumption. An increasing effort has been devoted to exploring energy recovery from nitrous oxide (N2O) as a powerful fuel additive rather than as an unwanted byproduct during biological nitrogen removal. This review aims to offer a holistic and critical analysis of the ideas for N2O production and energy recovery in terms of engineering feasibility, economic viability and environmental sustainability. It turns out that the recoverable energy from N2O produced in municipal wastewater is below 0.03 kWh/m(3), which is insignificant compared with the in-plant energy consumption, while complicated process configuration and high cost associated with harvesting and post-purification of N2O will be incurred. An environmental risk related to global climate change due to the emission of residual dissolved N2O is also concerned. Further effort on N2O production and recovery technologies is indeed required to improve the overall energy balance.