Electromagnetically induced transparency (EIT)is a quantum interference effect arising from different transition pathways of optical fields. Within the transparency window, both absorption and dispersion properties strongly change, which results in extensive applications such as slow light and optical storage. Due to the ultrahigh quality factors, massive production on a chip and convenient all-optical control, optical microcavities provide an ideal platform for realizing EIT. Here we review the principle and recent development of EIT in optical microcavities. We focus on the following three situations. First, for a coupled-cavity system, all-optical EIT appears when the optical modes in different cavities couple to each other. Second, in a single microcavity, all-optical EIT is created when interference happens between two optical modes. Moreover, the mechanical oscillation of the microcavity leads to optomechanically induced transparency. Then the applications of EIT effect in microcavity systems are discussed, including light delay and storage, sensing, and field enhancement. A summary is then given in the final part of the paper.