Abstract: The shortage of feed protein resources is the core issue restricting the sustainable development of livestock production in China. The development of indigenous unconventional protein feeds is an important approach to ensuring the national food security. The nutritional components and active substances of Azolla were systematically summarized, focusing on the research progress of its application in livestock production and circular agriculture. Azolla was rich in nutrients, containing various conventional nutrients for animal growth such as amino acids and minerals, as well as multiple bioactive components such as flavonoids and polyphenols. In the application of animal husbandry, Azolla could partially replace the traditional feeds such as fish meal and concentrate feeds. It not only maintained the growth performance of fish, poultry and pigs, ruminants, and special economic animals, but also significantly reduced the feed costs and improved the intestinal health, carcass quality and milk yield. In addition, the circular agricultural models centered on Azolla, such as the “rice–Azolla–fish/duck” and “pig–biogas–Azolla–fish” systems, have demonstrated favorable ecological and economic benefits. In the future, the three dimensions about systematic evaluation of germplasm resources, standardization of Azolla feeding technology, and industrialization of circular agricultural models should be synergistically advanced to provide technical support for the reduction and replacement of soybean meal as well as the green and low-carbon transition of agriculture.