With the development of techniques in molecular biology, the application of DNA technology is gradually being expanded from traditional biological areas to the studies of evolution, environmental and climatic changes. DNA is vulnerable to various abiotic (hydrolysis, oxydation, UV-damage) and biotic (enzyme damage) degradation processes, and was thought to be not persistent enough in geological samples. However, more and more researches have showed that ancient DNA older than thousands to millions years existed in fossil bones, permafrost, lacustrine and marine sediment samples. As a result, ancient DNA becomes an effective tool to investigate the evolution and migration of human, animals, plants, and even microbes, and their responses to the change of paleo-environment and paleo-climate. In return, ancient DNA also has played an important role in the reconstruction of paleo-environment and paleo-climate. For example, lacustrine sediment might have pooled with ancient DNA both from lake dwelling and catchment dwelling microbes, plants and animals. By sequencing these ancient DNA from sediment, people can catch the sight of regional evolution of microbes, plants and animals over the past time. This review will introduce ancient DNA preservation and its reliability in paleo-environmental and paleo-ecology studies, and will discuss the advantages of this ancient DNA approach in paleo-environmental and climatic reconstruction. We also pointed out a few important applications of the ancient DNA approach in biological evolution and environmental studies.