Rare earth elements and yttrium (REY) are indispensable strategic materials, with unique magnetic, electrical, and optical properties that underpin their key roles in renewable energy, electronics, and defense technologies. As terrestrial REY resources face increasing supply risks, deep-sea REY-rich sediments have emerged as a promising alternative. This review synthesizes recent advances in understanding their genesis, carrier phases, and global distribution: bioapatite and clay minerals are the primary mining targets within REY carriers; key enrichment factors include deep water depths (below the carbonate compensation depth, CCD), extremely low sedimentation rates, bottom current activity, and proximity to submarine volcanism and hydrothermal systems. Four major global REY mineralization belts are delineated, with the western Pacific REY Mineralization Belt showing the highest resource potential (local ultrahigh-grade layers have up to 8,000 ppm ΣREY). Despite their significance, technical and environmental challenges remain in exploration, sampling, and mining. Future research priorities: expand high-resolution surveys in mineralization belts, study REY’s diagenetic transfer and enriched layer stability, and develop low-impact sampling and eco-friendly extraction to support sustainable development.