Transfer RNA (tRNA)-derived small RNAs (tsRNAs) are among the most ancient small RNAs in all domains of life and are generated by the cleavage of tRNAs. Emerging studies have begun to reveal the versatile roles of tsRNAs in fundamental biological processes, including gene silencing, ribosome biogenesis, retrotransposition, and epigenetic inheritance, which are rooted in tsRNA sequence conservation, RNA modifications, and protein-binding abilities. We summarize the mechanisms of tsRNA biogenesis and the impact of RNA modifications, and propose how thinking of tsRNA functionality from an evolutionary perspective urges the expansion of tsRNA research into a wider spectrum, including cross-tissue/cross-species regulation and harnessing of the 'tsRNA code' for precision medicine.