Hydrogel-based functional materials have garnered widespread attentions across various fields due to their unique three-dimensional network microstructure and versatile, tunable properties. However, owing to the absence of a systematic analysis of the application mechanisms of hydrogels in diverse fields, accurately choosing the suitable type of hydrogel and its preparation method for specific application scenarios still presents challenges. This review explores the latest advances and continuing challenges for hydrogel-based functional materials, covering a variety of preparation methods, including chemical cross-linking, physical cross-linking, and radiation cross-linking, and applications in different fields, such as separation processing, agriculture, smart device, and biomedical engineering. Furthermore, the future research directions of hydrogel-based functional materials are outlined, which may focus on the development of environmentally friendly hydrogel materials, the study of high-precision and high-sensitivity hydrogels, and the in-depth exploration of the interaction mechanisms between hydrogels and biological systems. This review aims to provide comprehensive theoretical references and technical insights for the development of innovative hydrogel materials with more potential applications.