Hyperspectral remote sensing, which retrieves the water quality parameters by direct high-resolution analysis of the electromagnetic spectrum reflected from the water surface, has been widely applied for inland water quality detection. Such a new approach provides an opportunity to generate real-time data from water with the noncontact method, largely improving working efficiency. By summarizing the development and current applications of hyperspectral remote sensing, we compare the relative merits of varying remote sensing platforms, popular inversion models, and the application of hyperspectral monitoring of chlorophyll-a (Chl-a), transparency, total suspended solids (TSS), colored dissolved organic matter (CDOM), phycocyanin (PC), total phosphorus (TP), and total nitrogen (TN) water quality parameters. Most studies have focused on spaceborne remote sensing, which is usually used to monitor large waterbodies for Chl-a and other water quality parameters with optical properties; semiempirical, bio-optical, and semianalytical models are frequently used. With the rapid development of aerospace technology and near-surface remote sensing, the spectral resolution of remote sensing imaging technology has been dramatically improved and has begun to be applied to small waterbodies. In the future, the multiplatform linkage monitoring approach may become a new research direction. Advanced computer technology has also enabled machine learning models to be applied to water quality parameter inversion, and machine learning models have higher robustness than the three commonly used models mentioned above. Although nitrogen and phosphorus, with nonoptical properties, have also received attention and research from some scholars in recent years, the uncertainty of their mechanisms makes it necessary to maintain a cautious attitude when treating such research.