Refrigerant substitution is an urgent need in the context of reducing carbon emissions and slowing global warming. CO₂ is now being proposed as a promising solution based on its excellent properties and system performance, especially in low-temperature environments. This paper presents an overview of recent advances in system configuration and operation characteristics to improve the performance of transcritical CO₂ heat pump and refrigeration systems. The paper first introduces the basic research background, system cycle, and thermodynamic characteristics. Secondly, CO₂ cycle improvements with single modifications and modification combinations are reviewed. Then, some important operation characteristics and control methods are discussed. Additionally, the paper provides a detailed description of the development of transcritical CO₂ heat pump and refrigeration systems in the vehicle field. At the end of this review, conclusions and opportunities for future work in this field are presented.