Abstract: Huge amounts of plastic and biomass waste are discarded every year. In the context of carbon neutrality, co-pyrolysis technology is considered as a critical and promising route for upcycling plastic and biomass waste into value-added products. This study takes disposable polyethylene terephthalate plastic as a typical plastic, and reviews the factors affecting the synergistic effect, the high-value utilization of co-pyrolysis products, and the environmental significance of co-pyrolysis technology. The scientific problems, technical bottlenecks and policy defects of co-pyrolysis technology in the recycling of plastic and biomass waste are also prospected. The results show that compared to the pyrolysis of plastics or biomass alone, co-pyrolysis significantly reduces the energy consumption in the pyrolysis process and also improves both yield and quality of final products. The synergistic effect of plastics and biomass wastes in the co-pyrolysis process is due to the fact that hydrogen-rich plastics act as a ‘hydrogen reservoir’ to supply hydrogen to oxygen-rich biomass, which improves the stability of free radicals generated by biomass pyrolysis and promotes the thorough progress of co-pyrolysis reactions. The type and mixing ratio of raw materials, pyrolysis temperature, pyrolysis rate, and the addition of catalysts all have significant effects on the synergistic effect and product distribution of co-pyrolysis. The target products can be selectively prepared by adjusting the ratio of raw materials and pyrolysis conditions in the co-pyrolysis technology. Biochar, bio-oil and pyrolysis gas are the main products of co-pyrolysis. The pore structure and stability of biochar can be significantly enhanced during the co-pyrolysis process, thereby enhancing its carbon sequestration potential. Moreover, the caloric value and stability of pyrolysis gas and bio-oil can be increased during the co-pyrolysis, and the economic and environmental value of pyrolysis products can be improved. In the future, the co-pyrolysis process and related mechanisms should be further explored, the environmental health risks of co-pyrolysis products should be clarified, a green co-pyrolysis system should be established and the whole life cycle management policies for plastics should be proposed to realize the sustainable development of co-pyrolysis technology.