Dry eye is one of the most common ocular surface diseases. It is characterized by a loss of homeostasis of the tear film, and accompanied by ocular symptoms, in which tear film instability and tear hyperosmolarity, ocular surface inflammation, and neurosensory abnormalities play major etiological roles. Diquafosol tetrasodium is a purinergic P2Y2 receptor agonist that promotes mucin and aqueous tear secretion. The unique pharmacological mechanism of diquafosol tetrasodium opens up a new direction for the medical therapies of dry eye. This article reviews the clinical therapeutic effect and research progress of diquafosol tetrasodium for the past few years.