With the continuous development of the aerospace, defense, and military industry, along with other high-end fields, the complexity of machined parts has gradually increased. Consequently, the demand for tool intelligence has also strengthened. However, traditional tools are prone to wear during cutting due to high cutting forces, high temperatures, and vibrations. Intelligent tools, in contrast to traditional ones, integrate sensors into their design, allowing for real-time monitoring of the cutting status and timely prediction of tool wear. The application of intelligent tools in machining significantly enhances machining quality, increases productivity, and reduces production costs. In this review, first, the tool wear monitoring methods were classified and discussed. Second, the intelligence and innovation of sensors in monitoring cutting force, temperature, and vibration were introduced, and the commonly used types of sensors for online monitoring of cutting force were detailed. Furthermore, different types of sensors in tool wear were discussed, and the advantages of multi-sensor monitoring were summarized. Some urgent issues and perspectives that need to be addressed were proposed, providing new ideas for the design and development of intelligent tools.