Many industries face a critical sustainability issue due to increased freshwater scarcity for their water-intensive activities, especially textile industries. It is essential to find alternatives to freshwater resources to sustain industries, which can be achieved by reusing the efficiently treated domestic wastewater. This study aims to address the efficient treatment of domestic sewage for its reusability in textile dyeing applications and the treatment of generated dyeing wastewater for domestic purposes. Domestic sewage was efficiently treated using sequential microbial indigenous reactors combined with disinfection and sand filtration. The removal efficiency of chemical oxygen demand (COD), biochemical oxygen demand (BOD), ammoniacal nitrogen (NH4+-N), total nitrogen (TN) and total organic carbon (TOC) were 93.8% ± 1.04, 94.9% ± 0.9, 93.8% ± 5.7, 86.3% ± 3.8 and 92.3% ± 2.1, respectively, achieved. The final treated sewage had COD and BOD of 16 ± 5.3 mg L−1 and 3.84 ± 1.26 mg L−1. It was reused for the dye fabrication on a textile cloth and compared with the quality obtained using freshwater. The bursting strength value of both the dyed clothes remained the same (8.53 Kgs/sq.cm). The colour strength value of clothes dyed using treated water was higher than freshwater dyed clothes. Generated dye effluent was treated using advanced oxidation reactors followed by a bio-reactor. The removal efficiency was COD, 95.1% ± 0.58, BOD, 89.4% ± 3.02, TOC, 93.0% ± 1.82, TN, 76.7% ± 6.1 and NH4+-N, 58.4% ± 10.1. Thus, the study demonstrated the efficient treatment of domestic sewage for reusability in the textile dyeing process, followed by textile effluent treatment.