Liubao tea (LBT) is a unique microbial-fermented tea that boasts a long consumption history spanning 1500 years. Through a specific post-fermentation process, LBT crafted from local tea cultivars in Liubao town Guangxi acquires four distinct traits, namely, vibrant redness, thickness, aging aroma, and purity. The intricate transformations that occur during post-fermentation involve oxidation, degradation, methylation, glycosylation, and so forth, laying the substance foundation for the distinctive sensory traits. Additionally, LBT contains multitudinous bioactive compounds, such as ellagic acid, catechins, polysaccharides, and theabrownins, which contributes to the diverse modulation abilities on oxidative stress, metabolic syndromes, organic damage, and microbiota flora. However, research on LBT is currently scattered, and there is an urgent need for a systematical recapitulation of the manufacturing process, the dominant microorganisms during fermentation, the dynamic chemical alterations, the sensory traits, and the underlying health benefits. In this review, current research progresses on the peculiar tea varieties, the traditional and modern process technologies, the substance basis of sensory traits, and the latent bioactivities of LBT were comprehensively summarized. Furthermore, the present challenges and deficiencies that hinder the development of LBT, and the possible orientations and future perspectives were thoroughly discussed. By far, the productivity and quality of LBT remain restricted due to the reliance on labor and experience, as well as the incomplete understanding of the intricate interactions and underlying mechanisms involved in processing, organoleptic quality, and bioactivities. Consequently, further research is urgently warranted to address these gaps.