Metal-organic frameworks (MOFs) have emerged as a key focus in water treatment and monitoring due to their unique structural features, including extensive surface area, customizable porosity, reversible adsorption, and high catalytic efficiency. While numerous reviews have discussed MOFs in environmental remediation, this review specifically addresses recent advancements in modifying MOFs to enhance their effectiveness in water purification and monitoring. It underscores their roles as adsorbents, photocatalysts, and in luminescent and electrochemical sensing. Advancements such as pore modification, defect engineering, and functionalization, combined synergistically with advanced materials, have led to the development of recyclable MOF-based nano-adsorbents, Z-scheme photocatalytic systems, nanocomposites, and hybrid materials. These innovations have broadened the spectrum of removable contaminants and improved material recyclability. Additionally, this review delves into the creation of multifunctional MOF materials, the development of robust MOF variants, and the simplification of synthesis methods, marking significant progress in MOF sensor technology. Furthermore, the review addresses current challenges in this field and proposes potential future research directions and practical applications. The growing research interest in MOFs underscores the need for an updated synthesis of knowledge in this area, focusing on both current challenges and future opportunities in water remediation.