The impact on the natural characteristics of dairy products during thermal processing warrants the investigation of non-thermal techniques. Ozone has proved to be an effective and sustainable processing technology for the dairy processing sector. This review delves into the effect of ozone processing on the microbiological, physiochemical, nutri-functional, and sensory quality of milk and milk products. Alongside this, the other ozone applications in the dairy processing sector (storage room disinfection, wastewater treatment, benefits in Clean-in-Place (CIP) system, toxin reduction) have been discussed. Current regulatory and industrial status, and safety requirements in the facility have also been highlighted. Overall, ozone treatment has lower microbial inactivation efficiency in milk and milk products than thermal treatment. Further, safety precautions are needed in the processing areas due to its potential health hazard concerns.