Human embryonic stem cells (hESCs)- and induced pluripotent stem cells (hiPSCs)-derived retinal organoids (ROs) are three-dimensional laminar structures that recapitulate the developmental trajectory of the human retina. The ROs provide a fascinating tool for basic science research, eye disease modeling, treatment development, and biobanking for tissue/cell replacement. Here we review the previous studies that paved the way for RO technology, the two most widely accepted, standardized protocols to generate ROs, and the utilization of ROs in medical discovery. This review is conducted from the perspective of basic science research, transplantation for regenerative medicine, disease modeling, and therapeutic development for drug screening and gene therapy. ROs have opened avenues for new technologies such as assembloids, coculture with other organoids, vasculature or immune cells, microfluidic devices (organ-on-chip), extracellular vesicles for drug delivery, biomaterial engineering, advanced imaging techniques, and artificial intelligence (AI). Nevertheless, some shortcomings of ROs currently limit their translation for medical applications and pose a challenge for future research. Despite these limitations, ROs are a powerful tool for functional studies and therapeutic strategies for retinal diseases.