The global popularity of membrane separation is growing due to its high energy efficiency, small footprint, low capital, and operating cost, and especially its environmentally friendly process flexibility. Polycrystalline materials with high porosity, flexible micropore size, and functional tunability are promising membrane materials. However, the achieved membrane separation ef-ficiency is still far from the potential value predicted by material simulation mostly due to the existence of undesirable membrane imperfectness. Apart from the awareness of bulk film cracks, the impact of intercrystalline defects on the total performance of membranes is usually not well acknowledged. Defect formation is one of the bottleneck issues in polycrystalline membranes which not only significantly affects the efficiency of the membrane but also have an inevitable impact on its repeatability and process feasibility. Most research efforts in the polycrystalline membrane area have been devoted to developing novel structured polycrystalline materials. However, the summary of polycrystalline materials is beyond the scope of this work, instead, we complement existing membrane material reviews with a critical analysis of defect formation and mitigation strategies. This review presents the recent opportunities and challenges in poly-crystalline membrane fabrication, emphasizing the issue of unfavorable defect formation. The state-of-the-art solutions and strategies for mitigating defects have been reviewed and evaluated in detail. Finally, further understanding of defect formation and future research directions on characterization, defect evaluation, and membrane remediation have been outlined. This review offers valuable insights into fabricating compact polycrystalline membranes with high separation efficiency for various separation systems.