Structural health monitoring (SHM) plays a critical role in ensuring the safety of large-scale structures during their operational lifespan, such as pipelines, railways and buildings. In the last few years, radio frequency identification (RFID) combined with sensors has attracted increasing interest in SHM for the advantages of being low cost, passive and maintenance-free. Numerous scientific papers have demonstrated the great potential of RFID sensing technology in SHM, e.g., RFID vibration and crack sensing systems. Although considerable progress has been made in RFID-based SHM, there are still numerous scientific challenges to be addressed, for example, multi-parameters detection and the low sampling rate of RFID sensing systems. This paper aims to promote the application of SHM based on RFID from laboratory testing or modelling to large-scale realistic structures. First, based on the analysis of the fundamentals of the RFID sensing system, various topologies that transform RFID into passive wireless sensors are analyzed with their working mechanism and novel applications in SHM. Then, the technical challenges and solutions are summarized based on the in-depth analysis. Lastly, future directions about printable flexible sensor tags and structural health prognostics are suggested. The detailed discussion will be instructive to promote the application of RFID in SHM.