Fetal teratomas, though rare, represent a significant proportion of tumors arising during fetal development. These tumors arise from pluripotent cells and can present in varying degrees of severity, ranging from incidental findings to life-threatening conditions. Prenatal imaging, via ultrasound and MRI, is necessary for diagnosis and risk assessment. The management of fetal teratomas, particularly those associated with complications like hydrops or airway obstruction, often requires a multidisciplinary approach. Interventions such as ex-utero intrapartum treatment (EXIT) procedures and minimally invasive alternatives have emerged as critical tools to improve neonatal outcomes in severe cases. Despite advances in fetal therapies, careful prenatal monitoring and individualized management remain essential, especially for tumors with high vascularity or those that risk compromising cardiac output. This review explores the diagnostic methods, management strategies, and outcomes associated with fetal teratomas, highlighting recent advancements that contribute to improving survival and reducing morbidity in affected neonates.