Bryophytes including mosses, liverworts and hornworts are among the earliest land plants, and occupy a crucial phylogenetic position for the understanding of plant terrestrialization. Despite their small size and simple structure, bryophytes are the second largest group of the extant land plants. They live ubiquitously in various habitats and are highly diversified with adaptive strategies to modern ecosystems on Earth. More and more genomes and transcriptomes have been assembled to address fundamental questions in plant biology. Here, we reviewed the recent advances in bryophytes associated with diversity, phylogeny and ecological adaptation. The phylogenomic studies provided increasing support for the monophyly of bryophytes, with hornworts sister to the Setaphyta clade including liverworts and mosses. Further comparative genomic analyses revealed that multiple whole-genome duplications might have contributed to the species richness and morphological diversity in mosses. We highlight that the biological innovations through gene gain or neofunctionalization that primarily evolved in bryophytes facilitated the adaptation to early land environments, and among the adaptive strategies to modern ecosystems in bryophytes, desiccation tolerance is the most remarkable. More genomic information for bryophytes would shed lights on the key mechanisms for the ecological success of these “Dwarfs” in the plant kingdom.