The multibody system transfer matrix method (MSTMM), a novel dynamics approach developed during the past three decades, has several advantages compared to conventional dynamics methods. Some of these advantages include avoiding global dynamics equations with a system inertia matrix, utilizing low‐order matrices independent of system degree of freedom, high computational speed, and simplicity of computer implementation. MSTMM has been widely used in computer modeling, simulations, and performance evaluation of approximately 150 different complex mechanical systems. In this paper, the following aspects regarding MSTMM are reviewed: basic theory, algorithms, simulation and design software, and applications. Future research directions and generalization to more applications in various fields of science, technology, and engineering are discussed.