Abstract: Aquatic ecosystems play a pivotal role in ensuring national ecological security by serving as a fundamental foundation. Within these ecosystems, aquatic organisms occupy a central position, acting as crucial indicators for studying the evolution of water bodies and preserving aquatic ecological health. Traditional surveys and monitoring of aquatic organism have typically relied on morphological methods, which suffer from limitations such as high expertise requirements, standardization and automation difficulties, and time-consuming processes. Environmental DNA (eDNA) technology offers a promising alternative. This method identifies specific species by detecting DNA fragments present in the environment. By leveraging DNA molecules in water, eDNA technology provides an accurate, convenient, standardized, and automated approach for routine aquatic organism monitoring. This review introduces the basic principles of eDNA technology, summarizes the development history, and process of eDNA technology from its inception to widespread research applications. Furthermore, it explores various aquatic organism identification and monitoring technologies based on eDNA, including eDNA barcoding and metagenomics. The application of eDNA technology spans various fields, encompassing species conservation, invasive species monitoring, and aquatic ecological assessment. However, the review also addresses challenges confronting eDNA technology, such as the incompleteness of species reference sequence database. To tackle these challenges, the review suggests optimizing and enhancing databases, refining sample collection methods, and improving evaluation indicators, sample preservation, data analysis, and storage. Additionally, recommendations are provided for the standardized and automated implementation of aquatic organism eDNA monitoring in China, taking into account the current stage of development in eDNA technology.