In recent years, impact of human activities has led to the destruction of balance of the water ecosystem, sharp reduction of biodiversity of aquatic organisms and degradation of water ecological health. Rapid and effective monitoring aquatic organisms is a prerequisite for evaluating water ecological health and carrying out protection and management of water ecological environment. Environmental DNA (eDNA) technology is a technology that uses molecular biology methods to extract DNA from environmental samples, sequence and analyze it to infer species information. Because this technology can obtain a large amount of species information only by collecting environmental samples (water, soil, sediment, etc.), with the characteristics of non-invasive, high sensitivity and low cost, it has attracted much attention in recent years. However, existing research practice shows that the current eDNA technology still faces some challenges, hindering it from becoming a standard and routine application. In this review, applications of the eDNA technology in aquatic organism monitoring are illustrated from different aspects:biodiversity investigation, invasive and endangered species monitoring, diet analyses, etc. The problems and challenges faced by eDNA technology are summarized in five aspects, including sampling efficiency, false positive and false negative, uncertainty of eDNA source, missing data in database and unsatisfying quantitative methods. The solutions and technical breakthroughs to these problems are further discussed. Finally, future perspectives of the eDNA technology are discussed, in order to provide inspiration for future work using eDNA technology.