The widespread applications of ozone technologies are established on the basis of large-scale manufacture of ozone generator and chemical reactivity of ozone. It is hence necessary to summarize the principles of ozone generation and to analyze the physicochemical properties of ozone, which are of fundamental significance to indicate its technical developments and practical applications. This review presents a summary concerning ozone generation mechanisms, the physicochemical properties of ozone, as well as the applications of ozone in water treatment. Ozone can be produced by phosphorus contact, silent discharge, photochemical reactions, and electrochemical reactions, principally proceeding by the reaction of oxygen atom with oxygen molecule. There are side reactions to the generation of ozone, however, which are responsible for ozone depletion including thermal decomposition and quenching reactions by reactive species. The solubility of ozone in water is much higher than that of oxygen, suggesting that it may be reliably applied in water and wastewater treatment. Based on the resonance structures of ozone, one oxygen atom in ozone molecule is electron-deficient displaying electrophilic property, whereas one oxygen atom is electron-rich holding nucleophilic property. The superior chemical reactivity of ozone can also be indirectly revealed by radical-mediated reactions initiated from homogenous and heterogeneous catalytic decomposition of ozone. Owing to the reliable generation of ozone and its robust reactive properties, it is worthy to thoroughly elaborate the applications of ozone reaction in drinking water disinfection and pre- or post-treatment of industrial wastewater including cyanide wastewater, coking wastewater, dyeing wastewater, and municipal wastewater. The structural characteristics of ozone reactors and energy requirement of applied technologies are evaluated. In addition, future directions concerning the development of ozone generation, ozone reactivity, and industrial wastewater ozonation have been proposed.