Growing global population, escalating energy consumption, and climate change threaten future energy security. Fossil fuel combustion, primarily coal, oil, and natural gas, exacerbates the greenhouse effect driving global warming through CO2 emissions. To address such issues, research is focused on converting CO2 into valuable fuels and chemicals, which aims to reduce noxious CO2 and simultaneously bridge the gap between energy demands and sustainable supply. CO2 reduction has primarily been accomplished through three methodologies: photocatalysis, electrocatalysis, and photo‐electrocatalysis. Review initially elucidates fundamental principles and kinetics that govern CO2 reduction across all three approaches. Subsequently, we have discussed emerging concepts such as role of hot carriers and plasmon‐mediated processes in photocatalysis. In electrocatalysis process, we thoroughly discuss advanced design strategies including alloying, ligand‐modified surfaces, and molecular tuning to regulate the specific nanostructures of metal‐based compounds. Furthermore, it investigates impacts of distinct nanostructures to identify structure property‐performance correlations and their mechanisms. Similarly, enhancement of photo‐electrocatalytic efficiency is investigated using defect‐engineered nanostructures, heterojunctions, and plasmonic metals. Finally, the review outlines potential and intricacies associated with design strategies to drive industrial‐scale CO2 reduction. In summary, this comprehensive review offers a thorough analysis of current advances, challenges, and future perspectives for CO2 reduction to valuable products.