Inverse-electron-demand Diels-Alder (iEDDA) reactions are an intriguing class of cycloaddition reactions that have attracted increasing attention for their application in bioorthogonal chemistry, the total synthesis of natural products, and materials science. In many cases, the application of the iEDDA reaction has been demonstrated as an innovative approach to achieve target structures. The theoretical aspects of this class of reactions are of particular interest for scientists as a means to understand the various factors, such as steric strain and electron density of the attached groups, that govern the reaction and thus to elucidate the reaction mechanism. This review aims to summarize both theoretical investigations and application-driven research work on the iEDDA reaction. First, the historical aspects and the theoretical basis of the reaction, especially recent advances in time-dependent density functional theory (TD-DFT) calculations, as well as catalysis strategies will be highlighted and discussed. Second, the applications of this novel reaction in the context of materials science, bioorthogonal chemistry, and total synthesis of natural products will be elaborated with selected recent examples. The challenges and opportunities of the iEDDA reaction will be highlighted to give more insight into its potential applications in many other research areas.