The impact on the natural characteristics of dairy products during thermal processing warrants the investigation of non-thermal techniques. Ozone has not only arisen as an inactivation treatment for milk and its products with minimal effects on the quality parameters. But has also been proven efficient for reducing biofilms, antibiotics, and aflatoxins, and used for equipment sterilization, air disinfection, sanitization, and de-sludge treatments. This review discusses the updates on the effect of ozone processing on the microbiological, physiochemical, nutri-functional, and sensory quality of milk and milk products. Other applications of ozone in the dairy processing sector (storage rooms disinfection, wastewater treatment, benefits in CIP, toxin reduction), current industrial scenario, and regulatory and safety requirements in the facility dealing with ozone have also been discussed alongside the research gaps and challenges.