Abstract Electrochemical carbon dioxide reduction reaction (CO 2 RR) can convert CO 2 into high‐value chemicals and fuels, which not only offers a promising way to store the intermittent renewable electricity but also contributes to achieving carbon neutrality. Nevertheless, present‐day CO 2 RR mainly relies on the use of high‐purity CO 2 as the feedstock, while sourcing CO 2 from industrial flue gas requires additional costs for carbon capture and purification. Direct utilization of flue gas as feed for CO 2 RR presents a highly impressive perspective but is hampered by substantial barriers. In this review, we first elucidate the key challenges of direct flue gas conversion, including the complex gas composition, impurity poisoning effects, and critical carbon loss in neutral/alkaline electrolytes. Advanced catalyst design strategies that are aimed specifically at enhancing the conversion efficiency under low CO 2 concentration, suppressing the competitive oxygen reduction reaction, and alleviating the SO X /NO X interference are then presented. Moreover, innovative routes for the co‐electrolysis of CO 2 with impurity gases are also discussed. This review is ended by elaborating on the forward‐looking perspectives and key development directions in this exciting research field.