Bryophytes including mosses, liverworts, and hornworts are among the earliest land plants, and occupy a crucial phylogenetic position to aid in the understanding of plant terrestrialization. Despite their small size and simple structure, bryophytes are the second largest group of extant land plants. They live ubiquitously in various habitats and are highly diversified, with adaptive strategies to modern ecosystems on Earth. More and more genomes and transcriptomes have been assembled to address fundamental questions in plant biology. Here, we review recent advances in bryophytes associated with diversity, phylogeny, and ecological adaptation. Phylogenomic studies have provided increasing supports for the monophyly of bryophytes, with hornworts sister to the Setaphyta clade including liverworts and mosses. Further comparative genomic analyses revealed that multiple whole-genome duplications might have contributed to the species richness and morphological diversity in mosses. We highlight that the biological changes through gene gain or neofunctionalization that primarily evolved in bryophytes have facilitated the adaptation to early land environments; among the strategies to adapt to modern ecosystems in bryophytes, desiccation tolerance is the most remarkable. More genomic information for bryophytes would shed light on key mechanisms for the ecological success of these ‘dwarfs’ in the plant kingdom.