Chimeric antigen receptor-natural killer (CAR-NK) cell therapy is a novel immunotherapy targeting cancer cells via the generation of chimeric antigen receptors on NK cells which recognize specific cancer antigens. CAR-NK cell therapy is gaining attention nowadays owing to the ability of CAR-NK cells to release potent cytotoxicity against cancer cells without side effects such as cytokine release syndrome (CRS), neurotoxicity and graft-versus-host disease (GvHD). CAR-NK cells do not require antigen priming, thus enabling them to be used as "off-the-shelf" therapy. Nonetheless, CAR-NK cell therapy still possesses several challenges in eliminating cancer cells which reside in hypoxic and immunosuppressive tumor microenvironment. Therefore, this review is envisioned to explore the current advancements and limitations of CAR-NK cell therapy as well as discuss strategies to overcome the challenges faced by CAR-NK cell therapy. This review also aims to dissect the current status of clinical trials on CAR-NK cells and future recommendations for improving the effectiveness and safety of CAR-NK cell therapy.