Microdroplets in microfluidics offer a great number of opportunities in chemical and biological research. They provide a compartment in which species or reactions can be isolated, they are monodisperse and therefore suitable for quantitative studies, they offer the possibility to work with extremely small volumes, single cells, or single molecules, and are suitable for high-throughput experiments. The aim of this Review is to show the importance of these features in enabling new experiments in biology and chemistry. The recent advances in device fabrication are highlighted as are the remaining technological challenges. Examples are presented to show how compartmentalization, monodispersity, single-molecule sensitivity, and high throughput have been exploited in experiments that would have been extremely difficult outside the microfluidics platform.