Parasites are important pathogens with significant global economic, public and animal health impacts. Successful control or elimination of many parasitic diseases, not least neglected tropical parasites, will require scalable, sensitive and cost-effective monitoring tools. Environmental DNA (eDNA) methods, used extensively in ecology for biomonitoring in natural ecosystems, offer promising advantages such reduced costs and labor requirements for species monitoring. Yet, the use of eDNA-based methods in parasitology and disease surveillance, has only recently begun to be explored. With this review, we wish to give an up-to-date overview of current uses and limitations of eDNA in human and veterinary parasitology, and how existing challenges can be overcome to fully utilize the potential of eDNA for monitoring and control of parasitic diseases. We begin by systematically searching published literature to identify studies that apply eDNA methods in parasitology and synthesize the main findings from these studies. We find that eDNA applications in parasitology only account for a small proportion (73/1960) of all eDNA publications up to now, and even fewer (27/73) studies, that apply eDNA methods specifically for parasites of human or veterinary importance. The majority of studies concern snail-borne trematodes and their intermediate host snails, while a few apply eDNA for mosquito vector species detection. A strong geographical bias, with only very few studies undertaken on the African continent, where parasites are of the biggest public health concern, is also noted. Current obstacles hindering further advances of eDNA methods in parasitology include incomplete reference databases, and challenges related to real-time monitoring in remote areas, and in certain LMIC settings. Finally, we point to future opportunities for eDNA-based research in parasitology and highlight recent innovations in eDNA research, which could further develop its application for monitoring and control of parasitic diseases and vectors in the future.