The rapid development of lithium ion batteries (LIBs) and sodium ion batteries (SIBs) requires novel anode materials with high performance. Phase engineering has been regarded as a promising strategy used for enhancing the electrochemical performance of LIBs and SIBs due to its superiority of selectively synthesizing the phases with favorable electrochemical performance and reasonably designing the electrode materials with multiphase regulation. Recently, much progress has been made in phase engineering, including the strategies of phase transition and applications of phase engineering in lithium/sodium storage. This Research Update summarizes the structure and electrical characteristics of transition metal compounds with multiple phases, various strategies for their phase transition engineering, and advanced applications in lithium/sodium storage. Moreover, we also offer general perspectives on current obstacles and future chances in this emerging field, including exploration on the sodium/lithium storage mechanism toward different phases, understanding on structure–mechanism–performance relationships in conjunction with theoretical and experimental research, development of new materials with phase transition and new phase transition strategies, and design of a phase interface (phase junction) with novel phase engineering.