Ozonation has been applied in water treatment for more than a century, first for disinfection, later for oxidation of inorganic and organic pollutants. In recent years, ozone has been increasingly applied for enhanced municipal wastewater treatment for ecosystem protection and for potable water reuse. These applications triggered significant research efforts on the abatement efficiency of organic contaminants and the ensuing formation of transformation products. This endeavor was accompanied by developments in analytical and computational chemistry, which allowed to improve the mechanistic understanding of ozone reactions. This critical review assesses the challenges of ozonation of impaired water qualities such as wastewaters and provides an up-to-date compilation of the recent kinetic and mechanistic findings of ozone reactions with dissolved organic matter, various functional groups (olefins, aromatic compounds, heterocyclic compounds, aliphatic nitrogen-containing compounds, sulfur-containing compounds, hydrocarbons, carbanions, β-diketones) and antibiotic resistance genes.