Cationic lipids are crucial in medical and biotechnological applications including cellular transfection and gene delivery. Ionizable cationic lipids are critical components of the mRNA‐based COVID vaccines while permanently charged cationic lipids have shown promise in cancer treatment. Despite significant research progress over the past few decades in designing improved, biocompatible cationic lipids, their transfection efficiency remains lower than that of viral vectors. Cationic lipids with additional functionalities like fusogenicity, stimuli‐responsiveness, targeting capabilities, and therapeutic activity have been engineered to improve their performance. This review highlights the importance of molecular hybridization toward the design of biocompatible cationic lipids having fusogenic, stimuli‐responsive, targeting, or therapeutic properties. This review mainly focuses on cationic lipids, having a permanent positive charge in the headgroup region, as these are typically employed to both increase cellular interactions and for improved loading, particularly for anionic nucleic acid‐based therapeutics and vaccines. Structure–activity relationships between the lipid chemical structure (headgroup, spacer, hydrocarbon chain) and, to a lesser extent, the self‐assembled nanostructure and the intrinsic biological activity of the multi‐functional cationic lipids are described. Finally, the challenges involved in developing smart lipids without affecting their inherent capacity to self‐assemble into structured nano‐carriers are discussed.