Great progress in the development of low-cost ceramic membranes from alternative materials have been achieved recently towards various application especially water and wastewater treatment. However, their significance has not been fully recognized and understood especially in term of their microstructural analysis such as formation of grain growth and microcracks. This review paper summarizes fabrication method, alternative materials, microstructure, wettability, mechanical properties and application of low-cost ceramic membrane. The fabrication method including slip casting, tape casting, extrusion, pressing method and phase inversion technique are described. Alternative materials used in low-cost ceramic membrane fabrication are discussed and categorized into clays, agricultural waste, industrial waste and animal bone waste. The mechanisms of morphology formation, microstructure and wettability properties are analysed. Modification strategies for the surface of low-cost ceramic membrane are discussed, and classified into modification for separation application, modification for photocatalytic application and modification for membrane distillation and membrane contactor system. Modification improves the membrane structure by changing the pore size, porosity and wettability properties of low-cost ceramic membranes. Mechanical properties of low-cost ceramic membranes are also discussed in detail towards several mechanism, like grain growth phenomenon and formation of microcracks which also considered as membrane defects. Grain growth phenomenon can be divided into normal and abnormal grain growth. Meanwhile, formation of microcracks could be occurred in single-phase polycrystalline ceramics that have anisotropic grains or biphasic polycrystalline grains. The application of low-cost ceramic membrane in seawater desalination, oily wastewater treatment, heavy metal adsorption, textile separation and photocatalytic application are reviewed. Finally, some possible opportunities and challenges for further development of low-cost ceramic membrane are pointed out.