Membrane-based separation is one of the most energy-efficient methods to meet the growing need for a significant amount of fresh water. It is also well-known for its applications in water treatment, desalination, solvent recycling, and environmental remediation. Most typical membranes used for separation-based applications are thin-film composite membranes created using polymers, featuring a top selective layer generated by employing the interfacial polymerization technique at an aqueous-organic interface. In the last decade, various manufacturing techniques have been developed in order to create high-specification membranes. Among them, the creation of ultrathin polyamide membranes has shown enormous potential for achieving a significant increase in the water permeation rate, translating into major energy savings in various applications. However, this great potential of ultrathin membranes is greatly hindered by undesired transport phenomena such as the geometry-induced "funnel effect" arising from the substrate membrane, severely limiting the actual permeation rate. As a result, the separation capability of ultrathin membranes is still not fully unleashed or understood, and a critical assessment of their limitations and potential solutions for future studies is still lacking. Here, we provide a summary of the latest developments in the design of ultrathin polyamide membranes, which have been achieved by controlling the interfacial polymerization process and utilizing a number of novel manufacturing processes for ionic and molecular separations. Next, an overview of the in-depth assessment of their limitations resulting from the substrate membrane, along with potential solutions and future perspectives will be covered in this review.