Abstract Background Active Assisted Living (AAL) refers to the use of IoT devices to support quality of life, independence, and healthier living for care recipients. AAL-enabled smart homes have particular potential to help older adults reach their health and independent living goals, but there is a dearth of guidance on practical implementation. Additionally, different technology companies have each developed their own practices, leading to confusion and inconsistency. The objective of this work is to explore requirements for use of AAL in smart living environments for older adults, providing suggestions for best practice for AAL use considering their unique circumstances. Methods A review of academic and grey literature was performed to identify existing best practices and gaps for development of AAL-enabled environments. A technology review was also performed on 156 unique devices to understand the AAL tech ecosystem. Results Little guidance exists regarding designing smart living environments for older adults, though it exists for the two elements separately. The distinguishing elements are how AAL may connect the older adult to their care network, how the home may accommodate changing health needs, and older adults’ unique vulnerability. Furthermore, a large issue is a lack of interoperability and communication, which must be addressed in order to make AAL systems as low-effort and aligned with older adults’ preferences as possible. Conclusions As both tech and older adults’ needs evolve, key requirements of AAL-enabled smart living environments are robust data sharing pathways, planning for modifiability, and protecting the privacy of residents. The findings of this work will be used to identify opportunities for AAL standards development. Key messages • AAL-enabled smart homes must be able to accommodate an older adults’ shifting care needs and preferences over time. • It is necessary to establish how AAL smart home data may be shared with and used by care partners and providers.