Ni‐rich layered oxides are recognized as one of the most promising candidates for cathodes in all‐solid‐state lithium batteries (ASSLBs) due to their intrinsic merits, such as high average voltage and specific capacity. However, their application is profoundly hindered by sluggish interfacial lithium‐ion (Li+)/electron transfer kinetics, which is primarily caused by surface lithium residues, structural transformation, Li/Ni mixing, H2/H3 phase transition, and microcracks. Furthermore, electro‐chemo‐mechanical failures at the cathode/solid‐state electrolyte (SSE) interface, including interfacial side reactions, space‐charge layer (SCL) formation, and interfacial physical disconnection, accelerate capacity fading. This work provides a systematic overview of these challenges and fundamental insights into utilizing Ni‐rich layered cathodes in ASSLBs. Additionally, several key parameters, such as cost, energy density, pressure, and environmental temperature, are evaluated to meet the specific requirements of ASSLBs for commercial applications. Moreover, the representative modification strategies and future research directions for exploring advanced Ni‐rich layered cathode‐based ASSLBs are outlined. This review aims to provide a comprehensive understanding and essential insights to expedite the application of Ni‐rich layered cathodes in ASSLBs.