<p>This review explores the advancements in functional and smart textiles. Functional and smart textiles represent a transformative advancement in material science, integrating passive performance enhancements and dynamic responsiveness to environmental stimuli. This review provides a systematic comparative analysis of these two paradigms, clarifying their distinct roles and synergistic potential. It critically evaluates key fabrication technologies including coating, vapor deposition, sol-gel, plasma, and nanotechnology and assesses their scalability, durability, and suitability for specific applications. The study also explores the diverse applications of these textiles across healthcare, military, sports, and fashion sectors, highlighting innovations in wearable sensing, health monitoring, protective gear, and interactive apparel. Major challenges such as washability, power integration, material durability, biocompatibility, and manufacturing scalability are discussed in depth. By addressing these interdisciplinary barriers, this review identifies research gaps and future directions, offering a roadmap for transitioning laboratory innovations into commercially viable, next-generation intelligent textile systems.</p>