CD7 CAR-T cell therapy has emerged as a promising treatment for relapsed/refractory (R/R) CD7-positive hematological malignancies, offering new hope for patients with limited therapeutic options. This review examines the recent clinical advances, challenges, and future directions of CD7 CAR-T therapy. Clinical trials have demonstrated remarkable efficacy of CD7 chimeric antigen receptor T (CD7 CAR-T) cells in treating T-cell acute lymphoblastic leukemia (T-ALL), T-cell lymphoblastic lymphoma (T-LBL), and other CD7-positive malignancies, with complete remission (CR) rates of 90-95% in bone marrow (BM) and 50% to 60% in extramedullary disease (EMD). Various engineering strategies, including naturally selected CD7-targeted CAR-T cells, gene editing, protein blockers and universal CAR-T cells, have been developed to overcome challenges such as fratricide. While CD7 CAR-T therapy has shown promising initial responses, durable remissions often depend on consolidative allogeneic hematopoietic stem cell transplantation (allo-HSCT). Ongoing research is focused on optimizing CAR designs, improving CAR-T cell persistence, and developing novel combination strategies to enhance long-term outcomes. Safety profiles have been generally manageable, with cytokine release syndrome (CRS) and neurotoxicity being the primary concerns. However, prolonged cytopenias and potential long-term immunodeficiency due to depletion of healthy CD7-positive cells remain areas of active investigation. As CD7 CAR-T therapy continues to evolve, future directions include refining patient selection, exploring dual-targeting approaches, and investigating innovative strategies to integrate CAR-T therapy with allo-HSCT. These advancements aim to improve the efficacy, safety, and accessibility of CD7 CAR-T therapy for patients with CD7-positive hematological malignancies.