Modern society demands transitioning to sustainable agriculture to alleviate environmental effects. Traditional nitrogen fertilizers, like urea, lead to undesirable leaching, runoff losses, and low nutrient use efficiency in crops upon contact with water. Controlled‐release fertilizers (CRFs) present a promising solution by mitigating nutrient loss and enhancing plant uptake. However, concerns arise with synthetic polymer‐coated fertilizers, as they may not degrade in soil and can impact microbial activity. This review focuses on bio‐based coatings for CRFs, summarizing their performance over the past decade in the release properties in water and soil, water retention, biodegradability, and evaluating their efficacy in greenhouse and field trials. Additionally, the review explores innovative strategies for smart coating materials in CRF development, including pH‐sensitive, thermos‐sensitive, enzymatic‐sensitive, and self‐healing technologies. This critical evaluation aims to promote the development of more effective and sustainable fertilizers for agriculture.