Lithium (Li) metal batteries (LMBs) are the “holy grail” in the energy storage field due to their high energy density (theoretically >500 Wh kg−1). Recently, tremendous efforts have been made to promote the research & development (R&D) of pouch‐type LMBs toward practical application. This article aims to provide a comprehensive and in‐depth review of recent progress on pouch‐type LMBs from full cell aspect, and to offer insights to guide its future development. It will review pouch‐type LMBs using both liquid and solid‐state electrolytes, and cover topics related to both Li and cathode (including LiNixCoyMn1‐x‐yO2, S and O2) as both electrodes impact the battery performance. The key performance criteria of pouch‐type LMBs and their relationship in between are introduced first, then the major challenges facing the development of pouch‐type LMBs are discussed in detail, especially those severely aggravated in pouch cells compared with coin cells. Subsequently, the recent progress on mechanistic understandings of the degradation of pouch‐type LMBs is summarized, followed with the practical strategies that have been utilized to address these issues and to improve the key performance criteria of pouch‐type LMBs. In the end, it provides perspectives on advancing the R&Ds of pouch‐type LMBs towards their application in practice.