Collagen and its hydrolysates have high bioavailability, good biocompatibility, biodegradability, and biological activity which has meant that they have been widely used in food, medicine, cosmetics, and other industries. Although the properties and applications of collagen have been reviewed recently, few studies have focused on aquatic collagen. To provide readers with a deeper understanding of aquatic collagen, this review addresses the structure and properties of aquatic collagen and compares them with mammalian collagen, as well as the differences between collagen, gelatin, and collagen peptides. In contrast to mammalian collagen, aquatic collagen prevents zoonotic diseases, reduces environmental pollution, improves the utilization of aquatic resources, and facilitates the extraction and separation of active oligopeptides. Additionally, methods for screening functional peptides using in vitro digestion have been introduced. Finally, the review focuses on the applications of collagen and its derivatives in food preservation (packaging films, coatings, additives, and antifreeze peptides), drug delivery (microcapsules, emulsions, nanoparticles, and hydrogels), nutrition, and healthcare.