Abstract: Coastal wetlands, critical transitional zones between terrestrial and marine ecosystems, are among the most valuable ecosystems on Earth. They provide essential ecosystem services such as biodiversity conservation, carbon sequestration, storm buffering, and food provision, constituting sustainable nature-based coastal defences. Since the 1980s, however, global coastal wetlands have experienced widespread degradation and erosion due to reduced fluvial sediment supply caused by upstream regulation, intensified hydrodynamic forces, and accelerating sea-level rise, making wetland restoration a critical component of coastal zone management and climate adaptation strategies. Meanwhile, large volumes of dredged sediment are generated annually from port construction, navigation channel maintenance, and waterway engineering. Conventional disposal practices, including offshore dumping and land reclamation, are increasingly constrained by limited capacity, rising costs, and environmental concerns. The growing mismatch between dredged sediment production and disposal capacity highlights the urgent need for sustainable management strategies. Reconsidering dredged sediment as a valuable sediment resource rather than waste provides new opportunities to address both sediment disposal challenges and coastal wetland degradation. The use of dredged sediment to construct or enhance ecological substrates and implement coastal wetland restoration represents a promising Nature-based Solution (NbS) to mitigate coastal erosion and restore degraded wetlands. Sediment substrates form the physical foundation for salt marsh vegetation establishment and regulate hydrodynamic and biogeochemical processes. Positive feedbacks among sediment elevation, vegetation growth, and sediment accretion enhance wetland stability and resilience to hydrodynamic disturbance and sea-level rise. This paper systematically reviews the composition and engineering characteristics of dredged sediment, summarizes current practices of dredged sediment disposal and utilization, and synthesizes recent research on its ecological applications. In addition, this paper reviews the development and current status of dredged sediment utilization worldwide. International experience, particularly from Europe and the United States, demonstrates that ecological utilization of dredged sediment can increase sediment reuse efficiency while reducing disposal costs and environmental risks under complex coastal environments. In contrast, the application of dredged sediment in ecological restoration in China remains at an early stage, despite rapidly increasing dredging volumes and strong spatial-temporal mismatches between sediment supply and demand. Based on representative international and domestic case studies, three major application modes of dredged sediment in coastal wetland ecological restoration are identified. The first mode involves stabilizing erosional coastal wetlands through sediment augmentation techniques, such as thin layer placement and sediment diversion, to increase surface elevation and reduce erosion. The second mode focuses on restoring coastal wetland vegetation by improving substrate suitability, hydrological conditions, and wave attenuation, thereby facilitating natural recovery or assisted revegetation. The third mode emphasizes the construction of artificial ecological islands using dredged sediment to create new habitats, enhance biodiversity, and support wildlife conservation. Finally, future perspectives for the application of dredged sediment in coastal wetland ecological restoration are discussed, with emphasis on integrating NbS, promoting multi-objective management, and developing restoration technologies suitable for newly formed dredged sediment substrates. This review aims to provide scientific references for the ecological utilization of dredged sediment in coastal wetland restoration in China and to support sustainable sediment management and long-term coastal wetland resilience. It also offers a comprehensive framework linking sediment resource management with coastal wetland restoration practices, which may inform future policy-making and engineering applications under increasing pressures from sea-level rise and coastal erosion.