The escalating challenges of municipal solid waste (MSW) and wastewater management in developing nations necessitate innovative solutions. This study introduces a novel approach by utilizing hydrothermal carbonization (HTC) to co-process traditional market solid waste and laundry wastewater, addressing both solid and liquid waste streams while simultaneously recovering energy. The research optimized the HTC process using response surface methodology (RSM) with a Box-Behnken design, examining the effects of temperature (180−220 oC), process time (30-90 minutes), and biomass waste-to-water ratio (0.5-1) on hydrochar properties. The results demonstrate that increasing temperature and process time enhance hydrochar's calorific value (up to 25.479 MJ/kg), energy densification ratio (up to 1.417), and fixed carbon content, indicating improved fuel characteristics. Optimal conditions (199.394 oC, 30 minutes, 1:1 ratio) were identified using Minitab 19 software. This study's novelty lies in its integrated approach to waste treatment and resource recovery. The findings suggest that HTC can effectively transform market waste and laundry wastewater into valuable hydrochar, offering a sustainable alternative to landfilling, mitigating environmental pollution, and providing a renewable energy source.