Transposable elements (TEs) are the most prevalent elements in mammalian genomes. Although potential risks for genome stability, they are a pool of potential regulatory sequences, chromatin control elements, protein-coding genes, and substrates for evolutionary processes. Consequently, a delicate balance is maintained between the potential benefits and deleterious aspects of TEs, and this balance is mediated by the epigenetic regulatory system. In this review, we introduce the role of heterochromatin associated epigentic modifications such as histone 3 lysine 9 trimethylation (H3K9me3) and DNA methylation in the silencing of TEs as well as epigenetic modifications such as histone 3 lysine 4 monomethylation (H3K4me1) and histone 3 lysine 27 acetylation (H3K27ac) in activation of TEs. Further, we elaborate the functions of TEs as binding sites of transcription factors and as anchors of chromosomal conformation in regulation of gene expression. We introduce the impact of TEs on the process of cell fate determination including natural embryonic development in vivo and artificial cell fate transition in vitro. We discuss the main challenges associated with computational TEs analysis and TEs functions exploration, as well as the different experimental and computational strategies in studying these processes. In all, this article provides a comprehensive review of the research advances and existing problems in study of transposable elements in epigenetic regulatory mechanisms, gene transcriptional regulation, and cell fate determination, thereby providing some references for researchers in the fields.