Rational waste management is an essential element in the process of transitioning the linear economy into a circular model. Those actions that are taken to achieve better results in this area are important for regional and local development as well as for the implementation of sustainable development goals. This article presents the requirements and rules for the functioning of waste management in Poland. Taking the structure of the system into account, the functioning of waste management in the municipality of Krakow was analyzed. Particular attention was paid to the problem of municipal waste segregation by the inhabitants of Krakow. As part of our own research, surveys were conducted among the employees of the Municipal Cleaning Company LLC (Miejskie Przedsiębiorstwo Oczyszczania w Krakowie – MPO Sp. z o.o.), which showed the scale of the deficiencies. The results of the research were helpful in proposing actions to increase the effectiveness of the wastesegregation system in Krakow.