Polyurethane (PU) foams are cellular polymeric materials that have attracted much attention across various industries because of their versatile properties and potential for multifunctional applications. PU foams are involved in many innovations, especially in multi-functional and high-performance applications. Special attention is given to developing tailored PU foams for specific application needs. These foams have various applications including flame retardancy, sound absorption, radar absorption, EMI shielding, shape memory, and biomedical applications. The increasing demand for materials that can perform multiple functions while maintaining or enhancing their core properties has made PU foams a focal point of interest for engineers and researchers. This paper examines the challenges faced by the PU foam industry, particularly in developing multifunctional products, as well as the strategies for improving sustainability, such as producing PU foams from renewable resources and recycling existing materials.