A blue bag is a blue coloured, semi-transparent bag for waste, mandated for use in some localities for refuse or for certain specific types of refuse: the distinguishing color serves to assist in recycling programs. Typically, it would be used for glass, plastic or polyethylene content.
United States 
Chicago, Illinois 
The City of Chicago implemented a blue bag system in 1995. As it may be the case for all blue bag systems, it operates by requiring willing participants to purchase blue garbage bags (available at major grocery stores throughout the city) and depositing recyclable material in the bags. This may be paper-based (cardboard boxes, gift boxes, newspaper, etc.), plastic and glass, or yard/lawn refuse. A separate blue bag must be used for each of the three types of recyclable material.
The Chicago system has been criticized for its tediousness and inconvenience, as blue bags cost more to the homeowner than grocery bags and this system of recycling, compared to ones implemented in other cities and suburbs, requires additional effort. Chicago Sanitation management has claimed Chicago's Blue Bag system diverts approximately 25% of its waste to recycling facilities, which was its initial goal. However, most independent studies place the estimates at approximately 9% of the garbage picked up, resulting in continued criticism towards the program.
On May 2, 2008, the Chicago SunTimes reported that Chicago is giving up on the program. By 2011 there will be a shift to curbside recycling in blue carts.
Muncie, Indiana 
The Muncie Blue Bag program, delivered through Muncie Sanitary District, began in 1999 and has been working toward a goal of recycling 50 percent of Muncie's wastes. The program's effectiveness comes from its simplicity. While some programs require participants to clean and sort items before taking them to recycling centers, Muncie Recycling does the work instead. Everything just goes into Blue Bags.
United Kingdom 
Blue bags are used to distinguish different types of recyclable materials at the point of collection. The content allowed differs from area to area, depending on decisions of the local council.
Other uses 
A blue bag was a very small blue cloth bag containing crystals that one added to the 'whites' wash of a laundry session. The crystals dissolved and acted as a mild bleach. It was in widespread use in the UK at least until the 1950s.
In many healthcare facilities, large disposable blue bags (often with drawstrings) are commonly used to collect soiled linens. Some are printed with the words "Soiled Linens" and "Ropa Sucias" on them. (These bags fall in line with the color scheme of waste bags in the healthcare industry: red bags for biohazard/infectious waste, yellow bags for either chemo therapy waste or infectious soiled linens, and blue bags for soiled linens).
Crisps also used to have a blue bag in the pack, which contained the salt. One brand, marketed at traditionalists, still does this.