Heterocyclic compounds are used as a basic structural tool in medicinal chemistry and are very essential in our daily life. A wide range of heterocyclic compounds were reported to show in the literature with interesting biological and pharmacological properties. In their profound study on a series of several heterocyclic compounds shown to have bio applications, unfortunately, the aromatic π‐conjugated heterocyclic molecules quench the emission intensity due to aggregation caused quenching due to π–π stacking. Owing to the disadvantages, the design and function of aggregation‐induced emission (AIE) active heterocyclic materials were emerging abundantly. On the other note, AIE has often been used to further improve both the emission intensity and stability of compounds, with plenty of potential applications in chemical sensing and bioimaging. In this work, we comprehensively reviewed the recent progress in heterocyclic compounds with AIE characteristics that are effectively used in chemo‐selective and bio‐imaging or as highly selective sensors.