The immunoglobulin Y (IgY) derived from hyperimmune egg yolk is a promising passive immune agent to combat microbial infections in humans and livestock. Numerous studies have been performed to develop specific egg yolk IgY for pathogen control, but with limited success. To date, the efficacy of commercial IgY products, which are all delivered through an oral route, has not been approved or endorsed by any regulatory authorities. Several challenging issues of the IgY-based passive immunization, which were not fully recognized and holistically discussed in previous publications, have impeded the development of effective egg yolk IgY products for humans and animals. This review summarizes major challenges of this technology, including in vivo stability, purification, heterologous immunogenicity, and repertoire diversity of egg yolk IgY. To tackle these challenges, potential solutions, such as encapsulation technologies to stabilize IgY, are discussed. Exploration of this technology to combat the COVID-19 pandemic is also updated in this review.