The increasing trend of the use of synthetic products may result in an increased level of pollution affecting both the environment and living organisms. Therefore, from the sustainability point of view, natural, renewable and biodegradable materials are urgently needed to replace environmentally harmful synthetic materials. Jute, one of the natural fibers, plays a vital role in developing composite materials that showed potential in a variety of applications such as household, automotive and medical appliances. This paper first reviews the characterization and performance of jute fibers. Subsequently, the main focus is shifted towards research advancements in enhancing physical, mechanical, thermal and tribological properties of the polymeric materials (i.e., synthetic or biobased and thermoplastic or thermoset plastic) reinforced with jute fibers in a variety of forms such as particle, short fiber or woven fabric. It is understood that the physio-mechanical properties of jute-polymer composites largely vary based on the fiber processing and treatment, fiber shape and/or size, fabrication processes, fiber volume fraction, layering sequence within the matrix, interaction of the fiber with the matrix and the matrix materials used. Furthermore, the emerging research on jute fiber, such as nanomaterials from jute, bioplastic packaging, heavy metal absorption, electronics, energy device or medical applications and development of jute fiber composites with 3D printing, is explored. Finally, the key challenges for jute and its derivative products in gaining commercial successes have been highlighted and potential future directions are discussed.