The emergence of bispecific antibodies has transformed cancer immunotherapy, highlighting increased clinical efficacy, especially in hematological malignancies. These innovative molecules uniquely target two distinct tumor antigens or separate epitopes simultaneously, demonstrating potent antitumor activity across various cancers. Despite their promise, challenges like rapid drug clearance, off-target effects, and cytokine release syndrome hinder their widespread therapeutic application. Recent engineering advancements in bispecific antibody systems aim to overcome these challenges, broadening therapeutic coverage. This review offers insights into the latest clinical and preclinical progress in bispecific immunotherapy, outlining key challenges faced by the technique, and exploring emerging strategies to address these obstacles.