Valorization of nitrous oxide (N₂O), a potent greenhouse gas, through the oxidative dehydrogenation of light alkanes such as methane and propane to produce light olefins (ethylene and propylene), presents a promising technique for both environmental mitigation and valuable chemical production. This review provides a systematic analysis of the differences between N₂O and O₂ as oxidants, emphasizing the distinctive advantages of N₂O as a mild oxidant for olefin production. It delves into key technologies, such as oxidative dehydrogenation of propane (ODHP) to propylene and oxidative coupling of methane (OCM) to ethylene, focusing on the underlying reaction mechanisms and recent advancements in catalyst development. A major challenge in these reactions is the trade-off between activity and selectivity. To address this, we propose an innovative strategy–redox center separation–to enhance catalytic performance. This comprehensive review offers valuable insights for the rational design of catalysts, advancing sustainable chemical engineering processes that utilize N₂O, while addressing critical environmental and industrial challenges.