Continuously improving heat transfer efficiency is one of the important goals in the field of energy. Compact heat exchangers characterized by microscale flow and heat transfer have successfully provided solutions for this purpose. However, as the characteristic scale of the channels decreases, the flow and heat transfer characteristics may differ from those at the conventional scale. When considering the influence of scale effects and changes in special fluid properties, the flow and heat transfer process becomes more complex. The conclusions of the relevant studies have not been unified, and there are even disagreements on some aspects. Therefore, further research is needed to obtain a sufficient understanding of flow structure and heat transfer mechanisms in microchannels. This article systematically reviews the research about microscale flow and heat transfer, focusing on the flow and heat transfer mechanisms in microchannels, which is elaborated in the following two perspectives: one is the microscale single-phase flow and heat transfer that only considers the influence of scale effects, the other is the special heat transfer phenomena brought about by the coupling of microscale flow with special fluids (fluid with phase change (pseudophase change)). The microscale flow and heat transfer mechanisms under the influence of multiple factors, including scale effects (such as rarefaction, surface roughness, axial heat conduction, and compressibility) and special fluids, are investigated, which can meet the specific needs for the design of various microscale heat exchangers.