CO2-enhanced coalbed methane recovery (CO2-ECBM) represents a promising pathway within carbon capture, utilization, and storage (CCUS) technologies, offering dual benefits of methane production and long-term CO2 sequestration. This review provides a comprehensive analysis of CO2-ECBM from a full-chain perspective (Mechanism, Practices, and Outlook), covering fundamental mechanisms and key engineering practices. It highlights the complex multi-physics processes involved, including competitive adsorption–desorption, diffusion and seepage, thermal effects, stress responses, and geochemical interactions. Recent progress in laboratory experiments, capacity assessments, site evaluations, monitoring techniques, and numerical simulations are systematically reviewed. Field studies indicate that CO2-ECBM performance is strongly influenced by reservoir pressure, temperature, injection rate, and coal seam properties. Structural conditions and multi-field coupling further affect storage efficiency and long-term security. This work also addresses major technical challenges such as real-time monitoring limitations, environmental risks, injection-induced seismicity, and economic constraints. Future research directions emphasize the need to deepen understanding of coupling mechanisms, improve monitoring frameworks, and advance integrated engineering optimization. By synthesizing recent advances and identifying research priorities, this review aims to provide theoretical support and practical guidance for the scalable deployment of CO2-ECBM, contributing to global energy transition and carbon neutrality goals.