Windows are essential components of building environments because they allow light and heat penetration into interior spaces and serve as an interface for communication between a building’s interior and exterior. The development of smart windows has placed a great deal of emphasis on cholesteric liquid crystals (CLCs) because of their exceptional capacity to selectively reflect certain light wavelengths through Bragg reflection. They are perfect candidates for energy-efficient window technologies because of this feature as well as their dynamic tunability in reaction to external stimuli including light, electric fields, and temperature. Current developments have concentrated on improving the thermal and optical characteristics of CLC-based smart windows, which has improved their capacity to manage heat transmission, control solar radiation, and offer privacy without sacrificing visibility. The performance and durability of these systems have been further enhanced by advances in material design, such as the addition of polymer-stabilized CLCs. Furthermore, large-scale production and the integration of CLC-based windows in architectural applications have been made possible by improvements in fabrication techniques. In particular, their importance in energy-saving solutions for sustainable building design is discussed, along with the most recent advancements in CLC materials and their prospects for the future.