As an ancient infectious disease, tuberculosis (TB) is still the leading cause of death from a single infectious agent worldwide. Latent TB infection (LTBI) has been recognized as the largest source of new TB cases and is one of the biggest obstacles to achieving the aim of the End TB Strategy. The latest data indicate that a considerable percentage of the population with LTBI and the lack of differential diagnosis between LTBI and active TB (aTB) may be potential reasons for the high TB morbidity and mortality in countries with high TB burdens. The tuberculin skin test (TST) has been used to diagnose TB for > 100 years, but it fails to distinguish patients with LTBI from those with aTB and people who have received Bacillus Calmette–Guérin vaccination. To overcome the limitations of TST, several new skin tests and interferon-gamma release assays have been developed, such as the Diaskintest, C-Tb skin test, EC-Test, and T-cell spot of the TB assay, QuantiFERON-TB Gold In-Tube, QuantiFERON-TB Gold-Plus, LIAISON QuantiFERON-TB Gold Plus test, and LIOFeron TB/LTBI. However, these methods cannot distinguish LTBI from aTB. To investigate the reasons why all these methods cannot distinguish LTBI from aTB, we have explained the concept and definition of LTBI and expounded on the immunological mechanism of LTBI in this review. In addition, we have outlined the research status, future directions, and challenges of LTBI differential diagnosis, including novel biomarkers derived from Mycobacterium tuberculosis and hosts, new models and algorithms, omics technologies, and microbiota.