Abstract: Armoured mud balls represent a unique geological phenomenon formed as a direct result of sediment erosion, transport, and reshaping under specific hydrodynamic conditions. Their morphology, internal structure, and spatial distribution record the dynamic formation conditions and carry abundant palaeoenvironmental information. This makes them important proxies and archives for reconstructing palaeohydrological processes and palaeogeographical environments. Although research on them spans over a century, case studies worldwide remain relatively fragmented, and a systematic summary of their formation mechanisms, as well as an in-depth exploration of their environmental significance, is lacking. Therefore, this study aims to systematically review and synthesise the formative settings, morphological characteristics, and genetic mechanisms of mud balls in different global environments. It then discusses core controversies and limitations in current research, with the aim of providing clear direction and a theoretical basis for promoting standardised research and innovative applications in this field. This study employs a combination of bibliometric analysis and systematic review methodology. Systematic searches of academic databases are conducted to comprehensively collect case studies and authoritative review articles on armoured mud balls published globally. Additionally, this study conducts a multidimensional, cross-environmental synthesis and summary of morphological parameters (e.g., size and sphericity), spatial distribution patterns, formative dynamic processes, and ultimate preservation conditions of mud balls from various environments, such as rivers, coasts, lakes, deep marine settings, and volcanic terrains, using comparative analysis and inductive-deductive methods. This approach seeks to reveal their commonalities and differences. The results indicate that armoured mud balls are widely distributed in nature and that their morphological characteristics exhibit significant environmental dependence and indicative value. In fluvial environments, mud balls often have larger particle sizes (primarily with diameters of 10–25 cm) and high sphericity (often greater than 0.95). This is mainly attributed to continuous, multidirectional tumbling and abrasion within turbulent channel flows. In contrast, in coastal environments (e.g., tidal flats and beaches), mud balls are predominantly smaller (2–20 cm), often taking the form of ellipsoids or oblate spheroids, with spherical mud balls accounting for only 36.7%, which clearly reflects differential shaping by oscillatory wave action. Furthermore, research confirms a clear positive correlation between mud ball sphericity and transport distance. Larger mud balls require longer transport distances to achieve comparable sphericity to smaller ones. Notably, the surface armour layer, composed of sand, gravel, or shell fragments, is proven to significantly enhance structural stability. Relevant studies indicate that armouring can increase the abrasion and breakdown resistance of mud balls severalfold, which is key to their survival during long-distance transport. This study concludes that the formation of armoured mud balls cannot be explained by a single mechanism, but rather by a comprehensive dynamic model of erosion, abrasion, and accretion. This model reveals mud balls to be dynamic products formed through the combined and alternating actions of abrasion (rounding and shaping) and accretion (size increase and armouring) of the original clay clasts. The formation of these mud balls depends on two fundamental prerequisites: firstly, the availability of cohesive, clay-rich core materials (e.g., blocks from riverbank or seacliff collapse, or desiccated mud chips from tidal flats); and secondly, high-energy geological events (e.g., floods, storms, tsunamis, or pyroclastic flows) which provide sufficient energy for initiation and transport. However, their ultimate transformation from transient surface features into long-term preserved mud ball fossils within the stratigraphic record depends heavily on the key post-depositional process of rapid burial. This process effectively avoids their destruction by subsequent hydrodynamic reworking, desiccation cracking, freeze-thaw cycles, and other physical weathering processes.