Investigation of laser-induced damage (LID) of dielectric optical coatings was reviewed in this paper. Several methods for evaluating characters of LID were developed, especially for the determinations of laser-induced damage threshold (LIDT) and the detections of absorption based on surface thermal lensing (STL) technology of optical coatings. Defect was deemed to be the initial source of several previous damage mechanisms, and was the main factor restricting the laser damage resistance of optical coatings. A pulsed laser induced damage model with a spherical absorptive inclusion was proposed in order to obtain the nature, size and distribution of defects. Attentions were paid to find out the origins of damage mechanism transformation from one laser mode to another. Moreover, interests were focused on distinct damage behaviors of ultraviolet (UV) lasers. Deposition temperature and annealing process in vacuum chamber had obvious influences on LIDT of the third harmonic Nd:YAG laser coatings. At the end of this paper, several effective methods for improving LIDT were put forward, such as cleaning substrate, improving deposition process, adding protective layers, optimizing coating stacks based on temperature field theory, as well as laser conditioning.