Forest roads are a common land use feature with a significant impact on sediment yield and the water sediment transport processes within a watershed, seriously disrupting the safety and stability of the watershed. Previous studies have focused on the sediment production processes within the road prism. However, there has been limited attention given to the transport processes of road-eroded sediment at various scales, which is crucial for understanding the off-site effects of road erosion. This paper reviews research conducted on forest road erosion over the past two decades. It summarizes the mechanisms of sediment production from road erosion and provides a detailed analysis of the transport mechanisms of eroded sediments from roads to streams at the watershed scale. The paper also examines the ecological and hydrological effects, research methods, and control measures related to sediment transport caused by forest road erosion. It identifies current research limitations and outlines future research directions. The findings of this review highlight several key points: (1) Most research on forest road erosion tends to be specific and unilateral, often neglecting the broader interaction between roads and the watershed in terms of water–sediment dynamics. (2) Various research methods are employed in the study of forest road erosion, including field monitoring, artificial simulation experiments, and road erosion prediction models. Each method has its advantages and disadvantages, but the integration of emerging technologies like laser scanning and fingerprint recognition remains underutilized, hindering the simultaneous achievement of convenience and accuracy. (3) The transport processes of forest road-eroded sediment, particularly on road–stream slopes, are influenced by numerous factors, including terrain, soil, and vegetation. These processes exhibit significant spatial and temporal variability, and the precise quantification of sediment transport efficiency to the stream remains challenging due to a lack of long-term and stable investigation and monitoring methods. The establishment and operation of runoff plots and sedimentation basins may help offer a solution to this challenge. (4) Both biological and engineering measures have proven effective in reducing and limiting sediment erosion and transport. However, the costs and economic benefits associated with these regulation measures require further investigation. This review provides a comprehensive summary of relevant research on sediment erosion and transport processes on unpaved forest roads, enhancing our understanding of sediment yield in watersheds and offering valuable insights for reducing sediment production and transport to streams.