Proteins are the main source of drug targets and some of them possess therapeutic potential themselves. Among them, membrane proteins constitute approximately 50% of the major drug targets. In the drug discovery pipeline, rapid methods for producing different classes of proteins in a simple manner with high quality are important for structural and functional analysis. Cell-free systems are emerging as an attractive alternative for the production of proteins due to their flexible nature without any cell membrane constraints. In a bioproduction context, open systems based on cell lysates derived from different sources, and with batch-to-batch consistency, have acted as a catalyst for cell-free synthesis of target proteins. Most importantly, proteins can be processed for downstream applications like purification and functional analysis without the necessity of transfection, selection, and expansion of clones. In the last 5 years, there has been an increased availability of new cell-free lysates derived from multiple organisms, and their use for the synthesis of a diverse range of proteins. Despite this progress, major challenges still exist in terms of scalability, cost effectiveness, protein folding, and functionality. In this review, we present an overview of different cell-free systems derived from diverse sources and their application in the production of a wide spectrum of proteins. Further, this article discusses some recent progress in cell-free systems derived from Chinese hamster ovary and Sf21 lysates containing endogenous translocationally active microsomes for the synthesis of membrane proteins. We particularly highlight the usage of internal ribosomal entry site sequences for more efficient protein production, and also the significance of site-specific incorporation of non-canonical amino acids for labeling applications and creation of antibody drug conjugates using cell-free systems. We also discuss strategies to overcome the major challenges involved in commercializing cell-free platforms from a laboratory level for future drug development.