Driven by the carbon peak and carbon neutrality targets, urbanization in China has gradually witnessed a significant shift from emphasizing speed and scale to focusing on green and high-quality development. The industry of building demolition and solid waste recycling has embraced new opportunities and challenges. This study centers on the bottleneck issues of extensive demolition, low product quality, and the disjunction between demolition and utilization during the process of building demolition and solid waste recycling. Considering the requirements for green and sustainable development of urban renewal and the construction industry, we propose three key issues from the aspects of demolition, utilization, and their interconnection: (1) The obsolete demolition technologies result in the difficulty in precise demolition; (2) the discrete performance of demolition materials gives rise to the difficulty in achieving high-value effectiveness of recycled products typified by recycled aggregate concrete; and (3) the disconnection between demolition and utilization causes the difficulty in systematic application. Furthermore, the research status and technical shortcomings are analyzed from multiple links of the industrial chain. In combination with the research review and actual situation of building demolition and solid waste recycling in China, this study proposes a solution and development plan for future research with the goals of precise demolition, products with high added values, and systematic application, expecting to provide a reference for the research on waste recycling based on building demolition, promote the upgrading of relevant industries, and facilitate the low-carbon, green, and high-quality development of the construction industry.