Small open reading frames (sORFs) are often overlooked features in genomes. In the past, they were labeled as noncoding or “transcriptional noise”. However, accumulating evidence from recent years suggests that sORFs may be transcribed and translated to produce sORF-encoded polypeptides (SEPs) with less than 100 amino acids. The vigorous development of computational algorithms, ribosome profiling, and peptidome has facilitated the prediction and identification of many new SEPs. These SEPs were revealed to be involved in a wide range of basic biological processes, such as gene expression regulation, embryonic development, cellular metabolism, inflammation, and even carcinogenesis. To effectively understand the potential biological functions of SEPs, we discuss the history and development of the newly emerging research on sORFs and SEPs. In particular, we review a range of recently discovered bioinformatics tools for identifying, predicting, and validating SEPs as well as a variety of biochemical experiments for characterizing SEP functions. Lastly, this review underlines the challenges and future directions in identifying and validating sORFs and their encoded micropeptides, providing a significant reference for upcoming research on sORF-encoded peptides.