Chromatic confocal technology is widely used for precise, steady, and efficient displacement measurement in many industrial fields. It employs the confocal and dispersion principles to encode axial positions with the wavelengths of the reflected broad spectrum. The typical chromatic confocal sensor includes a light source, a dispersion objective, conjugate pinholes, and a spectral detection device. This study offers an overview of the current research on chromatic confocal technology. Because of its good performance in displacement detection, chromatic confocal technology has been widely used in contour measurement, biomedical imaging, and thickness measurements, as part of global and professional research. Due to its structural flexibility, it is also easily integrated into industrial equipment for in-machine and online profile measurements. It holds significant potential for future applications in industrial manufacturing and scientific research. However, there are also some challenges to be explored in terms of the broadband light source, dispersive optics design, and the balance between speed and accuracy in signal processing.