The formation of protein-protein interaction (PPI) networks is a central event in biochemical reactions within organisms. These interactions not only regulate normal physiological functions but are also closely associated with the onset and progression of diseases. PPIs are intricately regulated by proteins, nucleic acids, and their interactions. The complex molecular networks formed between these molecules serve as the foundation for most biochemical reaction events. Moreover, biological information is transmitted through countless molecular interactions within the cellular environment. A wide range of technologies has been developed to study PPIs, among which proximity-dependent biotinylation is a novel technique for labeling proteomes in living cells. This method utilizes engineered biotin ligases to specifically label nearby proteins or RNA molecules, enabling the capture of transient, weak, or stable interactions and facilitating the systematic construction of molecular interaction maps. Through continuous enzyme optimization and refinement, proximity-dependent biotinylation techniques have evolved into diverse systems with improved operational convenience and labeling efficiency. Each proximity-dependent biotinylation technique offers unique advantages: BioID is non-toxic to cells but suffers from low labeling efficiency, requires 18–24 h for labeling, and yields limited biotinylated products. TurboID achieves efficient labeling within 10 min, but its high activity and strong biotin affinity may lead to cytotoxicity. AirID enables low-toxicity labeling under low biotin concentrations but requires several hours to complete. UltraID offers the highest labeling activity with the smallest molecular weight but is prone to over-labeling. APEX provides convenient operation and can resolve protein topology, yet it has concentration-dependent limitations—forming dimers at high concentrations and lacking sensitivity at low concentrations. RNA-BioID is tailored for studying RNA–protein interactions but is limited by non-specific binding. TransitID can capture dynamic protein translocation at the subcellular level, though its temporal resolution still requires improvement. This review systematically summarizes the development, mechanisms, advantages, and disadvantages of proximity-dependent biotinylation techniques such as BioID, TurboID, AirID, UltraID, RNA-BioID, APEX, and TransitID. It also explores their cutting-edge applications in functional regulation and disease research. Proximity-dependent biotinylation techniques are widely used in disease-related studies. In tumor research, they are primarily applied to investigate the transcriptional regulation and chromosomal structural changes of proto-oncogenes and tumor suppressor genes. In the field of neuroscience, they are used to study mechanisms underlying nervous system function and neurological diseases. In viral infection mechanisms, they help elucidate virus–host interaction networks. In immune regulation, they contribute to the study of immune signaling pathways. In stem cell research, they aid in understanding cell differentiation processes. Furthermore, proximity-dependent biotinylation techniques hold promise for integration with spatial biology technologies, enabling more comprehensive and detailed protein studies. These techniques are expected to provide more accurate and efficient tools for life science research and to advance the medical and health fields to a higher level. By comprehensively analyzing the strengths, limitations, and innovative potential of each method, this review also highlights their advantageous applications in molecular interaction studies, aiming to provide methodological guidance and theoretical support for molecular mechanism research in the life sciences.