The Internet of Things (IoT) transforms smart environments by enabling interconnected devices to communicate and perform tasks autonomously. IoT architecture in these environments encompasses the integration of sensors, devices, networks, and platforms to facilitate efficient operations in sectors like smart cities, healthcare, and industry. However, due to its complex and fragmented ecosystem, IoT faces significant challenges, including scalability, security, privacy, and interoperability. Addressing these issues is crucial for building robust, secure, and efficient IoT architectures, guiding ongoing research toward future innovations and standards. This review explored key challenges in IoT architectures for smart environments, focusing on scalability, security, interoperability, privacy, and standardization. Scalability issues arise from managing large networks, while IoT’s heterogeneous nature complicates security. Ensuring interoperability between different devices and protocols is critical but challenging due to the lack of common standards. Privacy concerns arise from the vast amount of sensitive data IoT systems handle. We also discussed potential solutions, such as machine learning for scalability, blockchain for security, and global IoT frameworks for standardization. Lastly, future research directions include advancing Artificial Intelligence-driven automation, developing resilient security frameworks, and refining open-source platforms to promote interoperability and privacy.