Home cage monitoring (HCM) is increasingly being used in scientific studies but its application in the field of animal welfare is lagging. Advances in animal research are predominantly driven by scientific projects whose primary goal is increasing scientific knowledge but not animal welfare. Harnessing the potential of HCM to optimize animal welfare is clearly an ethical matter of Refinement, but it is also a prerequisite for improved quality and replicability in science and acceptance in society. HCM developments allow for uninterrupted recording of various parameters, and their analyses can be exploited for improved welfare monitoring. Here we provide an overview regarding animal welfare measures used in HCM studies and describe new developments in different research areas based on new methodological developments. We point at the importance of combining different readouts as integrative toolbox for an optimal severity assessment regarding experimental and/or humane endpoints as refinement to reduce unnecessary and avoidable discomfort. Dynamical analyses are required because for example alterations of circadian activity (fragmented sleep-wake cycles) require discrimination of deviations during light and dark phase, e.g. hyperactivity during the light and hypoactivity during the dark phase. Finally, we must be careful about the changeover from physiology to pathology because basic knowledge about many measures in 24/7 HCM is not yet known. Most studies predominantly used young adult animals and provide data originating from short-term experiments performed outside the home cage. These cannot serve as gold-standard when it comes to animal welfare. Many factors such as age, sex, and (sub-)strain can all affect HCM measures and require further exploration to better understand the current physiology-pathology gap to support animal welfare assessment. Future perspectives of HCM technologies and their potential applications for animal welfare monitoring are discussed.