Abstract: Tunnels and underground engineering are vital components of China's construction industry. Clarifying the current status of sustainable development and the key challenges faced by tunnel and underground engineering in China is of great importance for unlocking the potential for high-quality development of the industry and enabling a green transformation. To this end, this paper first reviews the relevant policies and development history of sustainable development in tunnel and underground engineering, exploring the key turning points for sustainable development in the industry. Secondly, from a whole lifecycle perspective, it expounds the current status of sustainable development in China's tunnel and underground engineering in six aspects: comprehensive planning, application of green materials, green construction methods, intelligent low-carbon operation and maintenance, and the recycling of industrial wastes. Lastly, it presents the challenges faced by the sustainable development of tunnel and underground engineering in China and offers pertinent suggestions: (1) leverage digital technology to break through the barrier of incomplete planning information; (2) continue finding new materials to enhance structural disturbance resistance and waterproofing; (3) integrate digital twin technology to make construction processes more intelligent; (4) use the engineering Internet of Things to enhance intelligent monitoring of engineering; (5) improve processes and equipment to increase the utilization rate and added value of construction waste. This research aims to provide useful insights for achieving a virtuous cycle of industry value addition and green development of China's construction industry