Natural Killer (NK) cells and CD8⁺ cytotoxic T cells are two types of immune cells that can kill target cells through similar cytotoxic mechanisms. With the remarkable success of chimeric antigen receptor (CAR)-engineered T (CAR-T) cells for treating haematological malignancies, there is a rapid growing interest in developing CAR-engineered NK (CAR-NK) cells for cancer therapy. Compared to CAR-T cells, CAR-NK cells could offer some significant advantages, including: (1) better safety, such as a lack or minimal cytokine release syndrome and neurotoxicity in autologous setting and graft-versus-host disease in allogenic setting, (2) multiple mechanisms for activating cytotoxic activity, and (3) high feasibility for ‘off-the-shelf' manufacturing. CAR-NK cells could be engineered to target diverse antigens, enhance proliferation and persistence in vivo, increase infiltration into solid tumours, overcome resistant tumour microenvironment, and ultimately achieve an effective anti-tumour response. In this review, we focus on recent progress in genetic engineering and clinical application of CAR-NK cells, and discuss current challenges and future promise of CAR-NK cells as a novel cellular immunotherapy in cancer.