Terahertz time-domain spectroscopy utilizes the absorption of a substance in a specific frequency range to acquire optical parameters such as refractive index, absorption coefficient, and the reflection coefficient of a substance. It has made significant contributions in the fields of food, drugs, and environment recently due to its benefits such as fingerprint, low energy, strong penetration, and coherence. This study focuses on the current research status of terahertz time‐domain spectroscopy in food, drugs, and environment based on an introduction to the principle of terahertz time-domain spectroscopy and method of acquiring optical parameters. Furthermore, for the future application of terahertz time‐domain spectroscopy in the fields of food, drugs, and environment, we summarize and assess its limits in practical work and its development possibilities.