In recent years, exploring the physiological and pathological mechanisms of brain functional integration from the neural network level has become one of the focuses of neuroscience research. Due to the non-stationary and nonlinear characteristics of neural signals, its linear characteristics are not sufficient to fully explain the potential neurophysiological activity mechanism in the implementation of complex brain functions. In order to overcome the limitation that the linear algorithm cannot effectively analyze the nonlinear characteristics of signals, researchers proposed the transfer entropy (TE) algorithm. In recent years, with the introduction of the concept of brain functional network, TE has been continuously optimized as a powerful tool for nonlinear time series multivariate analysis. This paper first introduces the principle of TE algorithm and the research progress of related improved algorithms, discusses and compares their respective characteristics, and then summarizes the application of TE algorithm in the field of electrophysiological signal analysis. Finally, combined with the research progress in recent years, the existing problems of TE are discussed, and the future development direction is prospected.