Combing the advantages of optical and ultrasound imaging, photoacoustic tomography is an emerging, fast growing biomedical imaging modality, possessing high resolution, superb contrast and deep tissue penetration. Photoacoustic microscopy (PAM) is an important embodiment of photoacoustic tomography. It has been extensively studied for preclinical and clinical applications by taking advantage of its ability to provide anatomical and functional information of live bodies noninvasively. To make people better understand the emerging technique, this review reviews the development status, latest technology, and application advances of PAM. We first introduce the working principle and typical system configurations and then discuss major advances in spatial resolution, imaging depth, scanning methods, signal detection methods, and multimodality imaging. Subsequently, we review the current status of biomedical applications of PAM. Finally, technical challenges of PAM in the translation to clinical settings are discussed.