As an intermediate step during energy usage, supercapacitors with superior power density, long‐term cycling stability, and moderate energy density have attracted immense interest as a facile route to use energy in a clean, efficient, and versatile manner in smart grid applications, as well as portable devices and other applications. Currently, the major drawback of supercapacitors is the low energy density. Electrode materials are the key components determining the cell performance. Great research efforts are made to develop nanostructured electrode materials with high performance. On the other hand, integrating supercapacitors with other applications have led to the emergence of many new types of multifunctional supercapacitors, which are attractive for a myriad of applications. The current understanding on charge/discharge mechanisms of electric double layer capacitors and pseudo‐capacitors is discussed along with recent development in designing nanostructured electrode materials by structure/morphology engineering, doping, and crystal structure controlling. Achievements in multifunctional supercapacitors like flexible supercapacitors, all‐solid‐state supercapacitors, self‐healing supercapacitors, electrochromic supercapacitors, self‐chargeable supercapacitors, and supercapacitors integrated with sensors are illustrated. Finally, opportunities and challenges in developing high performance and multifunctional supercapacitors are proposed. The exploration of high‐performance nanostructured supercapacitor materials and multifunctional supercapacitors have attracting immense attention in recent years. The details on the charge–discharge mechanism of supercapacitors, developments on various structure/morphology engineering of materials, and achievements in multifunctional supercapacitors are comprehensively presented. The perspectives on the standardization of measurements and challenges of supercapacitors are also addressed.