In recent years, substantial therapeutic efficacy of antibody-drug conjugates (ADCs) has been validated through approvals of 16 ADCs for the treatment of malignant tumors. However, realization of the maximum clinical use of ADCs requires surmounting extant challenges, mainly the limitations in tumor penetration capabilities when targeting solid tumors. To resolve the hurdle of suboptimal tumor penetration, miniaturized antibody fragments with engineered formats have been harnessed for ADC assembly. By virtue of their reduced molecular sizes, antibody fragment-drug conjugates (FDCs) hold considerable promise for efficacious delivery of cytotoxic agents, thus conferring superior therapeutic outcomes. This review will focus on current advancements in novel ADC development utilizing smaller antibody formats from approximately 6 to 80 kDa, with particular emphasis on single-domain antibodies, which have been widely applied in novel ADC design. Additionally, strategies to optimize clinical translation are discussed, including half-life extension, acceleration of internalization, and reduction of immunogenic potential.