As key components in efforts to achieve green and sustainable development in machinery, water-lubricated stern bearings are increasingly replacing traditional oil-lubricated bearings. However, water’s inherent properties—such as low viscosity and poor film-forming ability—can induce severe friction-induced vibration and noise under specific operational conditions. These issues not only accelerate wear but also compromise the vessel’s reliability and acoustic stealth, thereby limiting their wider application. This paper provides a comprehensive review of the research progress relating to friction-induced vibration in water-lubricated bearings. It delves into the underlying mechanisms, critiques the primary methodologies used in numerical simulations, summarizes key experimental approaches, and synthesizes the prevailing vibration suppression strategies. Finally, the study clearly outlines existing challenges and proposes directions for future research.