Abstract: Gas fermentation has emerged as a promising technology for carbon utilization by converting C1 gaseous substrates, such as carbon monoxide (CO), carbon dioxide (CO₂), and hydrogen (H₂), into biofuels and platform chemicals via acetogenic microorganisms. Driven by global carbon reduction and carbon neutrality goals, this technology has attracted increasing attention due to its ability to fix carbon funder mild conditions while directly utilizing industrial off-gases or renewable syngas. Consequently, it offers significant environmental and economic benefits in the field of carbon recycling. This review systematically summarizes recent advances in gas fermentation, beginning with the key functional microorganisms involved, with particular emphasis on acetogenic bacteria and their Wood–Ljungdahl pathway. The metabolic features and energy conservation strategies of this pathway are discussed to illustrate its central role in converting C1 substrates into acetyl-CoA. Subsequently, the major gaseous feedstocks—including industrial off-gases, biomass-derived syngas, and CO₂/H₂ mixtures—are classified and compared in terms of availability, composition, and application potential. The main fermentation products are then reviewed, focusing on acetate and ethanol as the most established compounds. In addition, recent studies demonstrate the feasibility of producing a broader range of value-added chemicals through metabolic engineering and process integration; these include medium-chain carboxylate acids (e.g., butyrate and caproate), their corresponding alcohols (e.g., butanol and hexanol), and biopolymers such as polyhydroxyalkanoates. Despite these advances, several key challenges still limit the large-scale application of gas fermentation, including the inherently low solubility of gaseous substrates, which results in gas–liquid mass transfer limitations, the relatively narrow product spectrum of native acetogens, and the difficulty in controlling product selectivity under industrial conditions. Finally, future perspectives are proposed to address these challenges. Strategies such as reactor and process optimization are expected to enhance gas–liquid mass transfer efficiency, while adaptive laboratory evolution and metabolic engineering may expand product diversity and improve carbon conversion efficiency. Furthermore, integrating gas fermentation with downstream bioprocesses—particularly chain elongation—offers a promising route to convert primary metabolites into higher-value chemicals. Through these advances, gas fermentation is expected to play an increasingly important role in circular carbon utilization and sustainable chemical production.