RNA-Seq technology is becoming widely used in various transcriptomics studies; however, analyzing and interpreting the RNA-Seq data face serious challenges. With the development of high-throughput sequencing technologies, the sequencing cost is dropping dramatically with the sequencing output increasing sharply. However, the sequencing reads are still short in length and contain various sequencing errors. Moreover, the intricate transcriptome is always more complicated than we expect. These challenges proffer the urgent need of efficient bioinformatics algorithms to effectively handle the large amount of transcriptome sequencing data and carry out diverse related studies. This review summarizes a number of frequently-used applications of transcriptome sequencing and their related analyzing strategies, including short read mapping, exon-exon splice junction detection, gene or isoform expression quantification, differential expression analysis and transcriptome reconstruction. To date, RNA-Seq has been applied to a number of species for various research, such as inferring alternative splicing [4,5], quantifying the expression of genes and transcripts [6,7], detecting gene fusions [8,9], revealing long noncoding RNAs (lncRNAs) [10], and identifying single nucleotide variants (SNVs) in expressed exons [11]. Although RNA-Seq has brought tremendous benefits to these studies, it also faces many challenges from both sequencing technologies themselves and bioinformatics analyses of the data. In detail, RNA-Seq has biases in library construction, and strand-specific libraries are still not easy to be produced but are important for determining the orientation of transcripts [1]. Furthermore, RNA-Seq generates a large amount of data, and the read length is generally short and sequencing errors exist in the reads. These aspects challenge the corresponding methods and algorithms to effectively process the large amount of RNA-Seq data.