DNA metabarcoding of diatoms is a next-generation biomonitoring tool, utilizing high-throughput sequencing technology for the identification and assessment of diatom biodiversity in aquatic ecosystems. Diatom DNA metabarcoding has been widely recognized as a powerful biomonitoring approach in comparison with the traditional morphological identification, which requires high expertise, is more costly and needs more time. This review provides a comprehensive overview of the methodological development, various applications, and challenges in this rapidly emerging field. A systematic search on the Web of Science database resulted in 128 papers directly related to diatom metabarcoding. Manual data extraction showed that elements of the metabarcoding workflow such as sampling, DNA extraction, PCR amplification, choice of barcode, high-throughput sequencing, and bioinformatic analyses have a direct influence on the results. This review highlights the influence of each workflow step on the reliability of the results. Despite its considerable advantages, this novel approach faces persistent challenges, including incomplete reference libraries, abundance quantification, and the diversity of bioinformatics analyses that can influence the outcomes. Nevertheless, diatom DNA metabarcoding rapidly developed into an efficient tool, fundamentally transforming our understanding of aquatic ecosystems and enhancing global biomonitoring capabilities.