The global demand for sustainable energy sources has led to extensive research regarding (green) hydrogen production technologies, with water splitting emerging as a promising avenue. In the near future the calculated hydrogen demand is expected to be 2.3 Gt per year. For green hydrogen production, 1.5 ppm of Earth’s freshwater, or 30 ppb of saltwater, is required each year, which is less than that currently consumed by fossil fuel-based energy. Functional ceramics, known for their stability and tunable properties, have garnered attention in the field of water splitting. This review provides an in-depth analysis of recent advancements in functional ceramics for water splitting, addressing key mechanisms, challenges, and prospects. Theoretical aspects, including electronic structure and crystallography, are explored to understand the catalytic behavior of these materials. Hematite photoanodes, vital for solar-driven water splitting, are discussed alongside strategies to enhance their performance, such as heterojunction structures and cocatalyst integration. Compositionally complex perovskite oxides and high-entropy alloys/ceramics are investigated for their potential for use in solar thermochemical water splitting, highlighting innovative approaches and challenges. Further exploration encompasses inorganic materials like metal oxides, molybdates, and rare earth compounds, revealing their catalytic activity and potential for water-splitting applications. Despite progress, challenges persist, indicating the need for continued research in the fields of material design and synthesis to advance sustainable hydrogen production.