The Chittagong Hill Tracts represent one of Bangladesh’s most significant natural reserves harboring rich biological diversity, with the lowest population density, while the rest of the country succumbed to population pressure. The CHTs area contains three regional river basins, Karnaphuli, Sangu, and Matamuhuri, and their tributaries characterize its biological diversity and cultural uniqueness. In this study, we have discussed the watershed characteristics and the various ecosystem services, mainly soil quality, biota, biodiversity, and water quality, of these watersheds that were reported in the studies in the last three decades. We have identified a research gap in this overview and highlighted it for future investigation. Additionally, this literature survey reveals challenges related to developmental stages that need further exploration. There is a lack of information and impact studies necessary to inform decision-making and policy proposals. Given the critical dependence of water security, wood, food, and medicinal plants on this biological reserve, immediate conservation and management interventions are essential to sustain the watershed, especially in the face of impending climate change.