Lithium‐sulfur batteries (LSBs) have recently gained extensive attention due to their high energy density, low cost, and environmental friendliness. However, serious shuttle effect and uncontrolled growth of lithium dendrites restrict them from further commercial applications. As “the third electrode”, functional separators are of equal significance as both anodes and cathodes in LSBs. The challenges mentioned above are effectively addressed with rational design and optimization in separators, thereby enhancing their reversible capacities and cycle stability. The review discusses the status/operation mechanism of functional separators, then primarily focuses on recent research progress in versatile separators with purposeful modifications for LSBs, and summarizes the methods and characteristics of separator modification, including heterojunction engineering, single atoms, quantum dots, and defect engineering. From the perspective of the anodes, distinct methods to inhibit the growth of lithium dendrites by modifying the separator are discussed. Modifying the separators with flame retardant materials or choosing a solid electrolyte is expected to improve the safety of LSBs. Besides, in‐situ techniques and theoretical simulation calculations are proposed to advance LSBs. Finally, future challenges and prospects of separator modifications for next‐generation LSBs are highlighted. We believe that the review will be enormously essential to the practical development of advanced LSBs.