This review article highlights the recent advances of the synthesis and application of metal nanoparticles (NPs) fabricated via pulsed laser ablation in liquid (PLAL) phase and also introduces relevant NP formation mechanisms. Although wet-chemical approaches have been well established to synthesize colloidal metal NPs with various components and structures, some inherent drawbacks, such as reaction residuals and/or contaminations, largely limit some of their applications. The PLAL method has recently been developed as an alternative approach and received increasing attention for colloidal NP preparation, without involving complicated chemical reactions. In certain cases, by using PLAL, ligand-free and surface-clean NPs can be obtained and well dispersed in liquid, leading to the formation of a "surface-clean" NP dispersion. This unique feature renders PLAL-synthesised metal NPs attractive candidates for many interesting applications in catalysis, biology, sensing, and clean energy generation and storage. We conclude this review by proposing several interesting research directions and future challenges, from PLAL fabrication to applications. We hope this review can serve as a good reference and help with the further development of PLAL-NPs and their diverse applications.