With the development of nanoengineering and nanotechnology, numerous emerging materials and constructions are being presented in optoelectronics to challenge traditional photoelectric effects and detecting techniques, and are inspiring innovation and growth in photoelectric research fields. Recently, due to its unique working mechanism, the lateral photovoltaic effect (LPE) has been identified as an indispensable and effective method of studying the properties of novel materials and also shows promising application in position sensors and photodetection. This article will present a comprehensive review of the recent progress on the LPE in novel materials, including metal nanomaterials, oxide semiconductors, organic semiconductors, two-dimensional layered materials, and perovskites. Moreover, it is demonstrated that the LPE is also very sensitive to different constructions or external modulations and can be substantially tuned by changing the structure or morphology of materials, adding external fields, and utilizing plasmon resonance. This summary may provide a comprehensive picture regarding the recent achievements of the LPE in novel materials and external modulations. Finally, we also present a discussion of the challenges and potential trends of the LPE in the near future.