AbstractWe prove new bounds on bilinear forms with Kloosterman sums, complementing and improving a series of results by É. Fouvry, E. Kowalski and Ph. Michel (2014), V. Blomer, É. Fouvry, E. Kowalski, Ph. Michel and D. Milićević (2017), E. Kowalski, Ph. Michel and W. Sawin (2019, 2020) and I. E. Shparlinski (2019). These improvements rely on new estimates for Type II bilinear forms with incomplete Kloosterman sums. We also establish new estimates for bilinear forms with one variable from an arbitrary set by introducing techniques from additive combinatorics over prime fields. Some of these bounds have found a crucial application in the recent work of Wu (2020) on asymptotic formulas for the fourth moments of Dirichlet ‐functions. As new applications, an estimate for higher moments of averages of Kloosterman sums and the distribution of divisor function in a family of arithmetic progressions are also given.