Considerable efforts have been devoted toward developing effective drug delivery methods. Microfluidic systems, with their capability for precise handling and transport of small liquid quantities, have emerged as a promising platform for designing advanced drug delivery systems. Thus, microfluidic systems have been increasingly used for fabrication of drug carriers or direct drug delivery to a targeted tissue. In this review, the recent advances in these areas are critically reviewed and the shortcomings and opportunities are discussed. In addition, we highlight the efforts toward developing smart drug delivery platforms with integrated sensing and drug delivery components.