The research presented in this paper shows that Waste Electrical and Electronic Equipment (WEEE) issues associated with home appliances, such as TV sets, refrigerators, washing machines, air conditioners, and personal computers, are linked in the WEEE flow and recycling systems and are important to matters of public policy and regulation. In this paper, the sources and generation of WEEE in China are identified, and WEEE volumes are calculated. The results show that recycling capacity must increase if the rising quantity of domestic WEEE is to be handled properly. Simultaneously, suitable WEEE treatment will generate large volumes of secondary resources. Environmental problems caused by the existing recycling processes have been investigated in a case study. Problems mainly stem from open burning of plastic–metal parts and from precious metals leaching techniques that utilize acids. The existing WEEE flow at the national level was investigated and described. It became obvious that a considerable amount of obsolete items are stored in homes and offices and have not yet entered the recycling system. The reuse of used appliances has become a high priority for WEEE collectors and dealers because reuse generates higher economic profits than simple material recovery. The results of a cost analysis of WEEE flow shows that management and collection costs significantly influence current WEEE management. Heated discussions are ongoing in political and administrative bodies as to whether extended producer responsibilities policies are promoting WEEE recycling and management. This paper also discusses future challenges and strategies for WEEE management in China.