With the development of industry and the rapid growth of population, the current water treatment technologies face many challenges. Hydrodynamic cavitation as a green and efficient means of water treatment has attracted much attention. During the hydrodynamic cavitation, enormous energy could be released into the surrounding liquid which causes thermal effects (local hotspots with 4600 K), mechanical effects (pressures of 1500 bar) and chemical effects (hydroxyl radicals). These conditions can degrade bacteria and organic substance in sewage. Moreover, the combination of hydrodynamic cavitation and other water treatment methods can produce a coupling effect. In this review, we summarize the methods of hydrodynamic cavitation and the performance of water treatment for different types of sewage. The application of hydrodynamic cavitation reactors with different structures in water treatment are also evaluated and discussed. The design and optimization of high-performance hydrodynamic cavitation reactor are the most crucial issues for the application of hydrodynamic cavitation in water treatment. Finally, recommendations are provided for the future progress of hydrodynamic cavitation for water treatment.