Aqueous zinc-iodine batteries (AZIBs) offer intrinsic safety, low cost, and high theoretical capacity, yet their practical performance is hindered by three coupled challenges: polyiodide shuttling that depletes active material and reduces coulombic efficiency; sluggish I2/I-/I3- redox kinetics that limit rate capability; and uncontrolled zinc dendrite growth that causes anode instability and parasitic reactions. This review summarizes recent advances addressing these issues across four domains. Cathode strategies include carbon-based hosts (hierarchical porosity, heteroatom doping, surface functionalization, electrocatalyst integration), ordered mesoporous frameworks, polymer matrices, iodine-containing perovskites, and emerging carriers. Anode designs involving artificial interfacial layers, three-dimensional zinc scaffolds, and anode-free configurations are evaluated for their ability to regulate Zn2+ flux and suppress dendrites. Separator and membrane modifications that block iodide crossover while maintaining ion transport are evaluated. Electrolyte developments encompass aqueous formulations with functional additives, water-in-salt systems, and solid/quasi-solid electrolytes that enhance stability and mechanical robustness. The review concludes with perspectives on key research priorities, including complete shuttle suppression, accelerated redox kinetics, durable dendrite control, and system-level feasibility through integrated material and interface engineering. This concise overview aims to guide the rational design of next-generation AZIBs with enhanced performance and durability.