Over the past two decades, advances in droplet-based microfluidics have facilitated new approaches to process and analyze samples with unprecedented levels of precision and throughput. A wide variety of applications has been inspired across multiple disciplines ranging from materials science to biology. Understanding the dynamics of droplets enables optimization of microfluidic operations and design of new techniques tailored to emerging demands. In this review, we discuss the underlying physics behind high-throughput generation and manipulation of droplets. We also summarize the applications in droplet-derived materials and droplet-based lab-on-a-chip biotechnology. In addition, we offer perspectives on future directions to realize wider use of droplet microfluidics in industrial production and biomedical analyses.