Biological soil crust (BSC), a complicated assemblage of cyanobacteria, green algae, diatoms, lichens, mosses, soil microbes and other related microorganisms cemented with soil particles with special architecture, covers more than 40% and even as much as 70% living surface in arid and semi-arid regions. Being an important ecosystem engineer and indicator of desert ecosystem health, BSC plays vital roles in linking the surficial biotic and abiotic components in arid and semi-arid regions and the related studies become a hotspot in the biological-geographic crossing studies in the earth surface process. However, most studies related to BSC came from abroad and mainly focused on hot desert, cold desert, polar and tundra as well as European grassland at the beginning of this century, little information available from Chinese temperate and central Asia desert. In this paper, we reviewed the research achievements in BSC by Chinese researchers since 2000 in the following aspects: (1) The composition, distribution and succession of BSC across Chinese temperate deserts, in particular, the responses of crustal species distribution pattern to climatic, soil properties and vascular plant cover at different spatial scales; (2) eco-physiological responses of BSC to environmental stress, climatic change as well as to natural and anthropological disturbances, large changes in rainfall regimes, UV-B radiation, nitrogen addition, salt and other stresses could result in the conversion of BSC types and further contribute to the changes in the structure and functioning of desert ecosystems; (3) the critical roles of BSC in the soil ecological and hydrological processes, including the dramatic influences of BSC on soil stability, C and N cycling, and other physiochemical properties, as well as infiltration, dew entrapment, soil surface evaporation and soil moisture; (4) the relationships between BSC and vascular plants and soil animals, such as the responses and underlying mechanisms of seed retention, germination, establishment and survival of vascular plants to the succession of BSC, and BSC creating a suitable niche and food web for soil animal and microorganisms, maintaining soil biodiversity; and (5) the cultivation and inoculation of components within BSC as new material applied for soil fertilization and desertification reversal, 6 cyanobacteria and 3 moss species inhabiting BSC were selected from different desert areas and successfully cultured in laboratory and then identified to enhance the stability, fertility and other physiochemical properties of the upper sand soil after their inoculation in the field. Finally, based on the analysis of the new trends in research vision, means and ideas of the international BSC study, we pointed out the key points for future research in BSC.