The immersed boundary method is a methodology for dealing with boundary conditions at fluid–fluid and fluid–solid interfaces. The immersed boundary method has been attracting growing attention in the recent years due to its simplicity in mesh processing. Great effort has been made to develop its new features and promote its applications in new areas. This review is focused on assessing the immersed boundary method fundamentals and the latest progresses especially the strategies to address the challenges and the applications of the immersed boundary method. Various numerical examples are also presented for demonstrating the capability of the immersed boundary method, including blood flow and blood cells, flapping flag, flow around a hoverfly, turbulence flow over a wavy boundary, shock wave-induced vibration, and acoustic waves scattered by a cylinder and a sphere. The major challenges and several open issues in this field are highlighted.