Deep-sea rare earth element and yttrium (REY) resources are crucial to the development of modern industry. However, the overexploitation of terrestrial REY resources has led to a series of environmental and sustainability issues. The discovery of deep-sea REY resources offers new opportunities for global REY supply, but key scientific questions such as the sources of REY, the minerals hosting these elements, and the mechanisms of ore formation still require in-depth investigation. On the technical front, challenges include the high difficulty and cost of deep-sea mining, immature purification and smelting technologies, and insufficient environmental impact assessments. This paper systematically summarizes the "source-transformation" processes, the state of existence, the ore-forming mechanisms, and the current technical challenges and environmental issues faced by deep-sea rare earth resources. Moreover, this article emphasizes the needs to strengthen fundamental research, technological innovation, and international cooperation to promote the efficient and environmentally friendly development of deep-sea REY resources. Additionally, it calls for the establishment of comprehensive environmental impact assessment systems, the optimization of market forecasting models, and the rational utilization of these resources within the framework of international law to ensure national resource security and promote global sustainable development.