The application of phase change material (PCM) has shown great potential in the fabrication of PCM-integrated cloth (PCMIC) due to its numerous advantages, including latent heat storage, narrow temperature range, energy storage density, longevity, and compatibility with textile processing. PCMs can lessen the demand for mechanical heating and cooling systems, which can save energy and assist the environment towards sustainability. PCM-integrated cloth provides new opportunities to enhance thermal comfort, energy efficiency, and functionality across a range of applications. The advancement of PCMIC has shown promise in the past decade. This review covers the fundamentals, latest advancements, characterization methods, and advanced applications of PCMIC in detail. Progresses, challenges, and opportunities of versatile applications of PCMIC in space wear, medical textiles, sportswear, bedding, thermoregulating buildings, flame-retardant textiles, automotive textiles, and footwear are critically summarized. Space agencies like NASA, and ESA used PCM-based products for comfortable space exploration while surgical gauges, bandages, and other clinical products incorporated with PCM comfort much in patients. Moreover, sportswear brands like Nike and Adidas utilized PCM in their products for better wearability. Through an analysis of the foundations, current developments, and challenges, this thorough overview is a valuable resource for further innovation and progress in the field of PCM-integrated textiles.