Redox flow batteries (RFBs) are promising electrochemical energy storage systems, offering vast potential for large-scale applications. Their unique configuration allows energy and power to be decoupled, making them highly scalable and flexible in design. Aqueous RFBs stand out as the most promising technologies, primarily due to their inexpensive supporting electrolytes and high safety. For aqueous RFBs, there has been a skyrocketing increase in studies focusing on the development of advanced functional materials that offer exceptional merits. They include redox-active materials with high solubility and stability, electrodes with excellent mechanical and chemical stability, and membranes with high ion selectivity and conductivity. This review summarizes the types of aqueous RFBs currently studied, providing an outline of the merits needed for functional materials from a practical perspective. We discuss design principles for redox-active candidates that can exhibit excellent performance, ranging from inorganic to organic active materials, and summarize the development of and need for electrode and membrane materials. Additionally, we analyze the mechanisms that cause battery performance decay from intrinsic features to external influences. We also describe current research priorities and development trends, concluding with a summary of future development directions for functional materials with valuable insights for practical applications.