As the most ancient RNA, transfer RNAs (tRNAs) play a more complex role than their constitutive function as amino acid transporters in the protein synthesis process. The transcription and maturation of tRNA in cells are subject to stringent regulation, resulting in the formation of tissue- and cell-specific tRNA pools with variations in tRNA overall abundance, composition, modification, and charging levels. The heterogeneity of tRNA pools contributes to facilitating the formation of histocyte-specific protein expression patterns and is involved in diverse biological processes. Moreover, tRNAs can be recognized by various RNase under physiological and pathological conditions to generate tRNA-derived small RNAs (tsRNAs) and serve as small regulatory RNAs in various biological processes. Here, we summarize these recent insights into the heterogeneity of tRNA and highlight the advances in the regulation of tRNA function and tsRNA biogenesis by tRNA modifications. We synthesize diverse mechanisms of tRNA and tsRNA in embryonic development, cell fate determination, and epigenetic inheritance regulation. We also discuss the potential clinical applications based on the new knowledge of tRNA and tsRNA as diagnostic and prognostic biomarkers and new therapeutic strategies for multiple diseases.