In an era of graphene-based nanomaterials as the most widely studied two-dimensional (2D) materials for enhanced performance of devices and systems in numerous environmental applications, molybdenum disulfide (MoS2) nanosheets stand out as a promising alternative 2D material with many excellent physicochemical, biological, and mechanical properties that differ significantly from those of graphene-based nanomaterials, potentially leading to new environmental phenomena and novel applications. This Critical Review presents the latest advances in the use of MoS2 nanosheets for important water-related environmental applications such as contaminant adsorption, photocatalysis, membrane-based separation, sensing, and disinfection. Various methods for MoS2 nanosheet synthesis are examined, and their suitability for different environmental applications is discussed. The unique structure and properties of MoS2 nanosheets enabling exceptional environmental capabilities are compared with those of graphene-based nanomaterials. The environmental implications of MoS2 nanosheets are emphasized, and research needs for future environmental applications of MoS2 nanosheets are identified.