i>Monascus is a kind of medicinal and edible filamentous fungus, which is widely used in food, medicine, biocatalysis and other fields. Monacolin K is the main metabolic functional active product of Monascus, with biological activities such as lipid-lowering, antifatigue, antibacterial, anticancer, and neuroprotective. It is widely recognized as an ideal drug for lowering cholesterol. The difference of monacolin K gene cluster synthesis between Monascus and Aspergillus terreus was compared, and the synthetic pathway of monacolin K produced by Monascus was expounded. The application and potential of monacolin K in fields such as medicine, health food, and feed were summarized and prospected. Due to the toxic effects of the fungal toxin citrinin produced during the fermentation of natural Monascus to produce functional substances, which has a toxic effect on the kidneys, liver, heart, and reproductive system, it limits the industrial development of Monascus. Improving the monacolin K production of Monascus and reducing the production of citrinin are important ways to solve the development issues of functional Monascus. Therefore, the technical methods for optimizing monacolin K production by Monascus and avoiding citrinin accumulation from aspects such as mutation breeding, construction of engineering strains, optimization of culture media, and control of environmental factors was summarized. The synthesis pathway, biological activity, and application fields of monacolin K produced by Monascus, as well as the current research status of biotechnology methods for high production of monacolin K were summarized. Based on this, the problems in the production of monacolin K by Monascus were analyzed, and suggestions and prospects were proposed, in order to provide theoretical basis and reference for the research and development of new types of Monascus health food.