Bruton’s tyrosine kinase (BTK) plays a crucial role in B-cell receptor and Fc receptor signaling pathways. BTK is also involved in the regulation of Toll-like receptors and chemokine receptors. Given the central role of BTK in immunity, BTK inhibition represents a promising therapeutic approach for the treatment of inflammatory and autoimmune diseases. Great efforts have been made in developing BTK inhibitors for potential clinical applications in inflammatory and autoimmune diseases. This review covers the recent development of BTK inhibitors at preclinical and clinical stages in treating these diseases. Individual examples of three types of inhibitors, namely covalent irreversible inhibitors, covalent reversible inhibitors, and non-covalent reversible inhibitors, are discussed with a focus on their structure, bioactivity and selectivity. Contrary to expectations, reversible BTK inhibitors have not yielded a significant breakthrough so far. The development of covalent, irreversible BTK inhibitors has progressed more rapidly. Many candidates entered different stages of clinical trials; tolebrutinib and evobrutinib are undergoing phase 3 clinical evaluation. Rilzabrutinib, a covalent reversible BTK inhibitor, is now in phase 3 clinical trials and also offers a promising future. An analysis of the protein–inhibitor interactions based on published co-crystal structures provides useful clues for the rational design of safe and effective small-molecule BTK inhibitors