This comprehensive review addresses the critical issue of Aflatoxin M1 contamination in milk, emphasizing its presence, detection methods, permissible levels, and associated health risks. Aflatoxin M1, a carcinogenic byproduct of Aflatoxin B1, poses significant concerns for the safety of milk, a crucial source of essential nutrients. Regulatory standards from entities like the European Union, U.S. FDA, and FSSAI highlight the need for monitoring and controlling contamination to protect public health. The review extensively explores diverse detection techniques, with ELISA standing out for its speed and precision. Preventive measures, including inhibiting contaminated feed intake, vaccination strategies, and judicious feed usage, are discussed as effective means to minimize Aflatoxin M1 in milk. However, complete elimination remains challenging, leading to the exploration of additional detoxification methods. The review covers various approaches during milk processing, such as pasteurization, sterilization, and the potential roles of probiotics. Absorption materials like bentonite and activated carbon show promise in binding and removing Aflatoxin M1, while chemical approaches with ammonia and hydrogen peroxide are examined with a cautious note on potential risks. Novel detoxification techniques involving plant extracts, including black cumin, garlic, and broccoli, is highlighted for their antioxidant properties. In conclusion, this review provides a foundational understanding of the multifaceted challenge of Aflatoxin M1 contamination in milk, offering insights for future research and the development of effective strategies to ensure the safety and quality of this dietary staple.