Microwave heating is rapidly emerging as an effective and efficient tool in various technological and scientific fields. A comprehensive understanding of the fundamentals of microwave–matter interactions is the precondition for better utilization of microwave technology. However, microwave heating is usually only known as dielectric heating, and the contribution of the magnetic field component of microwaves is often ignored, which, in fact, contributes greatly to microwave heating of some aqueous electrolyte solutions, magnetic dielectric materials and certain conductive powder materials, etc. This paper focuses on this point and presents a careful review of microwave heating mechanisms in a comprehensive manner. Moreover, in addition to the acknowledged conventional microwave heating mechanisms, the special interaction mechanisms between microwave and metal-based materials are attracting increasing interest for a variety of metallurgical, plasma and discharge applications, and therefore are reviewed particularly regarding the aspects of the reflection, heating and discharge effects. Finally, several distinct strategies to improve microwave energy utilization efficiencies are proposed and discussed with the aim of tackling the energy-efficiency-related issues arising from the application of microwave heating. This work can present a strategic guideline for the developed understanding and utilization of the microwave heating technology.