The building envelope serves as a barrier against climatic conditions and as insulation to prevent energy waste within buildings. As global energy shortages become more pressing, the requirements for building envelopes are becoming increasingly stringent. Among the available technologies, phase change materials (PCMs) stand out for their high latent thermal energy storage and temperature stabilization capabilities. This paper reviews the recent advancements in PCM technology for building envelopes, starting with an overview of organic, inorganic, and eutectic PCMs, along with their respective advantages and disadvantages. The paper explores various incorporation methods such as shape stabilization, macroencapsulation, micro/nanoencapsulation, and solid–solid transition techniques. The integration of PCMs enhances thermal inertia, reduces thermal fluctuations, and delays heat peaks, presenting several multifunctional benefits. However, challenges such as fire hazards, potential toxicity, pollution, reduced mechanical performance, and higher initial costs persist. In light of these challenges, criteria for PCM integration in building applications are introduced. Additionally, the paper reviews recent hybrid technologies that combine PCMs with other novel technologies for building envelopes, including radiant temperature regulation systems, thermochromic windows, passive radiative cooling coatings, and others. It is shown that these PCM-integrated hybrid technologies significantly improve energy savings and indoor comfort. PCMs offer substantial potential for modern green building strategies and have further applications in other building contexts. Finally, the paper provides future prospects for studies in this field, aiming towards a green and energy-saving future.