RNA modifications play crucial roles in shaping RNA structure, function, and metabolism. Their dysregulation has been associated with many diseases, including cancer, developmental disorders, cardiovascular diseases, as well as neurological and immune-related conditions. A particular type of RNA modification, 2'-O-methylation (Nm) stands out due to its widespread occurrence on all four types of nucleotides (A, U, G, C) and in most RNA categories, e.g., mRNA, rRNA, tRNA, miRNA, snRNA, snoRNA, and viral RNA. Nm is the addition of a methyl group to the 2' hydroxyl of the ribose moiety of a nucleoside. Given its great biological significance and reported association with many diseases, we first reviewed the occurrences and functional implications of Nm in various RNA species. We then summarized the reported Nm detection methods, ranging from biochemical techniques in the 70's and 80's to recent methods based on Illumina RNA sequencing, artificial intelligence (AI) models for computational prediction, and the latest nanopore sequencing methods currently under active development. Moreover, we discussed the applications of Nm in the realm of RNA medicine, highlighting its therapeutic potential. At last, we present perspectives on potential research directions, aiming to offer insights for future investigations on Nm modification.