The real-time observation of atomic motion in space and time is of great importance for natural science research. Ultrafast electron diffraction (UED) technique, which is equipped with both the high temporal resolution of femtosecond laser pulses and the high spatial resolution of electron diffraction, can provide an effective approach to study the structural change of matter in atomic scale. In this review, we make an introduction of the development history, experimental methods, related applications and future prospects of UED technique.