Steviol glycosides (SGs) are high-intensity, zero-calorie natural sweeteners with demonstrated safety and potential health benefits, positioning them as ideal sucrose substitutes for metabolic disorder management. However, their broad application is limited by inherent drawbacks such as bitterness, low solubility, and inefficient production systems. This review provides a comprehensive summary of recent advances in SG research, covering their sources, properties, and bioactivities. A particular focus is placed on innovative bioproduction strategies—including enzyme engineering, metabolic pathway optimization, and sustainable extraction techniques. Strategies to overcome these challenges through sensory-function enhancement—including formulation and structural modification—are discussed. Furthermore, it highlights emerging trends like microbial chassis-based production and next-generation sweetener design, providing actionable insights for overcoming industrial bottlenecks. By integrating multidisciplinary advances in bioengineering, sensory science, and sustainable processing, this review offers a forward-looking perspective on the development and application of SGs as functional sweeteners in the global food industry.