Magneto-optical indicator films (MOIFs) are a very useful tool for direct studies of the spatial distribution of magnetic fields and the magnetization processes in magnetic materials and industrial devices such as magnetic sensors, microelectronic components, micro-electromechanical systems (MEMS), and others. The ease of application and the possibility for direct quantitative measurements in combination with a straightforward calibration approach make them an indispensable tool for a wide spectrum of magnetic measurements. The basic sensor parameters of MOIFs, such as a high spatial resolution down to below 1 μm combined with a large spatial imaging range of up to several cm and a wide dynamic range from 10 μT to over 100 mT, also foster their application in various areas of scientific research and industry. The history of MOIF development totals approximately 30 years, and only recently have the underlying physics been completely described and detailed calibration approaches been developed. The present review first summarizes the history of MOIF development and applications and then presents the recent advances in MOIF measurement techniques, including the theoretical developments and traceable calibration methods. The latter make MOIFs a quantitative tool capable of measuring the complete vectorial value of a stray field. Furthermore, various scientific and industrial application areas of MOIFs are described in detail.