Abstract: This review aimed to systematically analyze the global development trajectory, technological advancements, and persistent challenges facing the plant factory industry. The primary objectives were to delineate the historical and current status of plant factories as a transformative agricultural paradigm, synthesize the key technological innovations driving their evolution, and identify the critical bottlenecks hindering their widespread commercialization. Furthermore, this review sought to evaluate strategic countermeasures and propose a coherent future outlook to inform policymakers, researchers, and industry stakeholders, thereby facilitating the sustainable integration of plant factories into modern agricultural systems. This study was conducted as a systematic literature review, incorporating analysis of industry reports from international consulting firms (e.g., Mordor Intelligence, Insight Partners), academic publications, and documented case studies of prominent plant factory installations worldwide. The methodological approach involved a historical analysis to trace the industry's development from its inception in the 1950s to its current state. A comparative analysis was employed to examine the developmental paths and technological foci of different regions, including Japan, South Korea, Europe, the United States, and China. The core technological progress in areas such as lighting, automation, and vertical farming was synthesized from recent scientific literature and technical reports. Finally, the economic and market challenges were identified through an examination of cost-breakdown data and analyses of commercial adoption and profitability metrics reported in the industry.The review revealed that plant factories have transitioned from a conceptual novelty to a rapidly growing industry, with significant market growth projections driven by global pressures such as population growth, arable land reduction, and demand for clean food. The historical analysis showed that the advent of LED lighting and intelligent control systems in the 21st century marked a critical turning point, enabling unprecedented energy efficiency and control. The results identified three core areas of technological advancement: First, in light efficiency, the development of photobiology-based "light recipes" and the adoption of red-blue LEDs increased photon efficacy to 4.1 μmol/J, while light-temperature coupling strategies and root-zone microclimate control reduced comprehensive energy consumption. Second, in spatial utilization, vertical farming systems, exemplified by a 20-layer facility in China, demonstrated land use efficiency exceeding 120 times that of traditional open-field cultivation. Third, in production automation, the integration of sensors, robotics, and AI has enabled the automation of the entire crop cycle, from seeding to packaging, addressing the high labor cost which constitutes approximately 20% of operational expenses. However, the analysis also identified three major bottlenecks. The initial construction cost remained prohibitively high, with building structures and lighting equipment accounting for 60%-70% of the capital expenditure. Operational energy consumption was found to be the most significant on going expense, representing 20%-30% of total costs and dominated by lighting and air conditioning. Consequently, achieving commercial profitability was challenging, with an estimated 10%-30% of Japanese facilities being profitable and an even lower proportion anticipated in China, largely due to insufficient market differentiation and consumer awareness to justify the premium production costs. This review concludes that the plant factory represents a pivotal and advanced form of controlled environment agriculture with immense potential to contribute to global food security, urban sustainability, and resource-efficient food production. Its successful commercialization and scalability are contingent upon a multi-pronged strategy that integrates continuous technological innovation, strategic policy support, and proactive market development. Technologically, future progress hinges on cross-disciplinary research that deepens the understanding of plant physiology under controlled conditions and further refines automation, energy recycling, and the exploration of novel physical environmental factors like flow, electric, and magnetic fields. From a policy perspective, government intervention is now essential to de-risk the high initial investment through subsidies, tax incentives, and reduced energy tariffs, mirroring successful models like those in Japan. Furthermore, the industry must actively cultivate its market by demonstrating the value of its clean, safe, and nutrient-dense products and by integrating production into diverse urban scenarios—from households and communities to vertical farms within skyscrapers—thereby enhancing urban food resilience. Ultimately, the transition of plant factories from a promising technology to a mainstream agricultural solution requires a concerted effort from researchers, industries, and governments to overcome the existing economic and technical hurdles, solidifying its role in the future of sustainable agriculture.