Dynamic Bragg gratings can be recorded in rare-earth (e.g. Er, Yb) doped optical fibres by two counter-propagating mutually coherent laser waves via local saturation of the fibre optical absorption or gain (in optically pumped fibres). Typical recording cw light power needed for efficient grating formation is of sub-mW–mW scale which results in characteristic recording/erasure times of 10–0.1 ms. This review paper discusses fundamental aspects of the population grating formation, their basic properties, relating wave-mixing processes and also considers different applications of these dynamic gratings in single-frequency fibre lasers, tunable filters, optical fibre sensors and adaptive interferometry.