Abrasive Water Jet Machining (AWJM) has emerged as a versatile non-conventional machining process for a wide range of engineering materials, including metals, composites, and ceramics. It’s cold cutting action prevents thermal damage and residual stresses, making it particularly suitable for temperature-sensitive and difficult-to-machine materials commonly used in structural and functional applications. This review consolidates recent research progress in AWJM, with emphasis on process parameter optimization, abrasive selection, nozzle design, and system integration. Material-oriented studies that address surface integrity, dimensional accuracy, and machinability are highlighted. Developments in hybrid approaches, where AWJM is coupled with other manufacturing techniques to improve efficiency and versatility, are also examined. Current limitations, such as the lack of robust real-time monitoring systems, limited predictive modelling capability, and insufficient attention to sustainability, are critically discussed. Future perspectives include the adoption of data-driven modelling and machine learning for intelligent process control, exploration of environmentally benign abrasives, and the advancement of AWJM at micro- and nano-scales. The review aims to provide researchers and practitioners with a comprehensive understanding of AWJM, offering insights into its role in advancing modern manufacturing of engineering structures and materials.