The world is currently facing issues such as food security and soil degradation. The cultivation of green manure crops represents a promising pathway for soil health and sustainable agricultural development. The traditional concept of green manure highlights its role in enhancing soil fertility, and neglects its roles in fostering soil health, improving eco-environment and sustainable development of agriculture. This review broadens the definition of green manure and synthesizes recent advances in its effects on improving soil physical, chemical, and biological properties and enhancing overall soil health. It also summarizes the current understanding of the ecological services provided by green manure, including carbon sequestration and emission reduction, biodiversity enhancement, pest and weed suppression, soil and water conservation, environmental remediation, and productivity improvement. Progress in field management practices, including species selection, cropping systems, and residue incorporation methods, is also summarized. Future research should emphasize the breeding of stress-tolerant green manure varieties, construction of symbiotic systems between green manure and soil microorganisms, innovation of cultivation and management methods, and exploration of industrialization pathways. With the continuous expansion of green manure cultivation area and its enormous application potential, strengthening policy frameworks related to subsidies, public awareness, research investment, and industrial integration is essential to promote green manure research and industrial development, thereby contributing to global sustainable agriculture.