The concept of using noninvasive cameras swallowed in capsules to image the gastrointestinal tract has led to the development of a commercial diagnostic instrument called capsule endoscopy. This technique is a valuable alternative to the standard diagnostic modality for gastric lesions known as esophagogastroduodenoscopy (EGD). Advances in technology enabling the realization of capsule endoscopy are described, notably those in computer hardware, imaging techniques, and artificial intelligence. Diseases for which capsule endoscopy diagnosis is indicated are discussed, e.g., gastroesophageal reflux disease, obscure gastrointestinal bleeding, cirrhosis and portal hypertensive bleeding, coeliac disease, small bowel tumors, and colorectal polyps. Capsule endoscopy is limited by the passive movement of capsules via bowel peristalsis. Magnetic manipulation systems have been developed for capsule locomotion, orientation, localization, and manipulation. These maneuverable capsules provide a more detailed evaluation and accurate diagnosis of affected regions. Many research groups work on detecting suspected lesions and delivering drugs to specific sites for targeted therapeutics. This makes it an efficient tool for treating diverse pathologies without requiring sedation. The present status and research trends of capsule endoscopy are summarized.