Lithium phosphorous oxynitride (LiPON) as one of the most successful solid‐state electrolytes (SSEs), has attracted great interest both in academia and technology due to its exceptional interfacial compatibility, broad electrochemical stability window, and excellent thermal stability, which enables the realization of extremely stable electrolyte/electrode interphase toward high‐energy density solid‐state lithium‐metal batteries (SSLMBs). However, insufficiency in ionic diffusion, mechanical robustness, and interfacial stability hinder its commercialization process. Herein, the characteristics of amorphous structure LiPON, fundamental understanding on the bulk ionic diffusion and electrode/electrolyte interface are systematically discussed, and the improvement strategies to boost the electrochemical performance are highlighted. Then, innovative characterization and computational methods help to unravel the design principle of LiPON are summarized. Furthermore, the approaches to realize high‐efficient preparation of LiPON are analyzed, followed by the investigation of present application of LiPON in current batteries. Finally, remaining challenges associated with the fundamental understanding and rational prediction of structure and interface design, high efficient preparation, and potential opportunities for future application of LiPON are properly prospected.