Although anion exchange membrane water electrolyzer (AEMWE) is an emerging device in the green hydrogen production industry, the use of alkaline electrolyte tackles the practicality due to the issues of lowering system efficiency and environmental impacts. State‐of‐the‐art technology using pure water as an electrolyte is advancing to overcome the current challenges of AEMWE. In particular, the development of this technology requires a comprehensive evaluation of techno‐economic aspects, aiming to balance innovation with cost considerations. This involves the critical development of advanced catalysts, membranes, and devices designed for efficiency, as well as assessing their economic viability amidst prevailing technological challenges. This review delves into the timely technical challenges of developing pure water‐fed AEMWE, highlights current progress and research prospects, and suggests opportunities for advancing AEMWE technology. This review also emphasizes the importance of advanced characterization techniques for effective analysis and evaluation in this context.