Abstract: Carbon fiber reinforced polymer (CFRP) composites have gained widespread application in aerospace, automotive manufacturing, wind turbine blades, and other fields due to their high specific strength, high specific stiffness, excellent fatigue resistance, and superior corrosion resistance. However, characteristics such as anisotropy and low interlaminar strength render them highly susceptible to various forms of damage during the drilling process, significantly affecting the service performance of the components. This paper presents a systematic review of the formation mechanisms of drilling damage in CFRP, its influence on the mechanical performance of laminates, and recent advances in damage suppression strategies. Typical damage, including fiber burrs, fiber tearing, hole-wall damage, and internal delamination, are first summarized in terms of their characteristics and underlying formation mechanisms, together with the application of acoustic emission techniques for damage identification and monitoring. The effects of drilling damage on the tensile, compressive, flexural, bearing, and fatigue properties of CFRP laminates are then critically discussed, with particular emphasis on the intrinsic correlations between damage evolution and mechanical property degradation. Damage suppression strategies are systematically reviewed from the perspectives of process parameter optimization, dedicated tool development, advanced drilling technologies, and intelligent process control. Followed by a discussion of future research directions, future studies should focus on further elucidating the quantitative relationship between drilling damage and mechanical performance, while advancing multiscale simulation methods, intelligent in-process monitoring, and adaptive control technologies, thereby promoting high-quality and high-efficiency drilling of CFRP components.