In the last few years, high-throughput (or ‘next-generation’) sequencing technologies have delivered a step change in our ability to sequence genomes, whether human or bacterial. Further comparative genome analysis enables us to reveal detailed knowledge of genetics or physiology of industrial important strains obtained in laboratory, to analyze genotype-phenotype correlations of mutants with improved performance. Based on identified key mutations or mutation combinations, Inverse Metabolic Engineering (IME) can be performed by using accurate genetic modification system. Recently, IME has been successfully used for strain improvement and has become a research hotspot, including improving substrate utilization, engineering the robustness of industrial microbes and enhancing production of bio-based products. Here, we describe recent advances in research methods of IME, with an emphasis on characterization of genotype-phenotype and the latest advances and application of IME. Possible directions and challenges for further development of IME are also discussed.