Two-dimensional layered transition metal dichalcogenides, represented by MoS2, have drawn widespread interest in the fields of optoelectronics and energy. Intrinsic defects in MoS2, inevitably generated in initial preparation, ruin its intrinsic properties but also broaden its range of applications. To achieve targeted functionalization of MoS2, the impact of defects and the corresponding physicochemical mechanisms must be understood in depth. Here, we review the current atomic structure characterization of intrinsic defects, discuss how the physical and chemical properties of MoS2 change in the presence of defects, and address how these changes induce negative or positive effects in varied application scenarios. Current approaches to filling or passivating defects, as well as in situ synthesis and post-processing methods for generating defects are summarized.