Autophagy, a highly conserved cellular degradation mechanism, maintains intracellular homeostasis by removing damaged organelles and abnormal proteins. Its dysregulation is closely associated with various diseases. Autophagy-related protein 12 (ATG12), a core member of the ubiquitin-like protein family, covalently binds to ATG5 through a ubiquitin-like conjugation system to form the ATG12-ATG5-ATG16L1 complex. This complex directly regulates the formation and maturation of autophagosomes, making ATG12 a key molecule in the initiation of autophagy. Recent studies have revealed that ATG12 functions extend far beyond the classical autophagy context. It promotes apoptosis by binding to anti-apoptotic proteins of the Bcl-2 family (e.g., Bcl-2 and Mcl-1) and enhances host antiviral immunity by regulating the NF-κB and interferon signaling pathways. Moreover, ATG12 deficiency can lead to mitochondrial biogenesis impairment, energy metabolism disorders, and substrate-dependent metabolic shifts, underscoring its pivotal role in cellular metabolic homeostasis. At the disease level, dysregulation of ATG12 expression is closely linked to tumorigenesis and cancer progression. By modulating the dynamic balance between autophagy and apoptosis, ATG12 influences cancer cell proliferation, metastasis, and chemoresistance. Notably, ATG12 is abnormally overexpressed in multiple cancers, including breast, liver, and gastric cancer, highlighting its potential as a therapeutic target. Furthermore, in neurodegenerative diseases such as Parkinson’s disease, ATG12 mitigates protein toxicity by enhancing mitochondrial autophagy. In cardiovascular diseases, it alleviates ischemia-reperfusion injury by regulating cardiomyocyte autophagy and apoptosis, demonstrating its broad regulatory role across various pathological conditions. Genetic studies further underscore the clinical significance of ATG12. Polymorphisms in the ATG12 gene (e.g., rs26537 and rs26538) have been significantly associated with the risk of head and neck squamous cell carcinoma, hepatocellular carcinoma, and atrophic gastritis. Notably, the risk allele of rs26537 enhances ATG12 promoter activity, leading to its overexpression and promoting tumorigenesis. These findings provide a molecular basis for individualized risk assessment and targeted interventions based on ATG12 genotype. Despite significant progress, many aspects of ATG12 biology remain unclear. The precise regulatory mechanisms of its post-translational modifications (e.g., ubiquitination and acetylation) are yet to be fully elucidated. Additionally, the molecular pathways underlying its non-canonical functions, such as metabolic regulation and immune modulation, require further investigation. Moreover, the functional heterogeneity of ATG12 in different tumor microenvironments and its role in drug resistance warrant in-depth exploration. Future research should integrate advanced technologies such as cryo-electron microscopy, single-cell sequencing, and organoid models to decipher the intricate regulatory network of ATG12. Additionally, developing small-molecule inhibitors or gene-editing tools targeting its protein interaction interfaces (e.g., the ATG12-ATG3 binding domain) may help overcome current therapeutic challenges. Through interdisciplinary collaboration and clinical translation, ATG12 holds promise as a next-generation molecular target for precision intervention in autophagy-related diseases. This review summarizes the structure and function of ATG12, its role in autophagy initiation, its physiological functions, and its involvement in disease pathogenesis. Furthermore, it discusses future research directions and potential challenges, emphasizing ATG12’s potential as a biomarker and therapeutic target in autophagy-related diseases.