The concept and applications of “inclusion” during the modern iron- and steel-making processes provide advanced support for the research on ancient iron and steel materials. The analysis of inclusions in ancient iron and steel materials has become an indispensable part of the research on archaeometallurgy. This article first combs the mechanisms of inclusion generation in different ancient chemical and physical metallurgical processes, and then summarizes the characterization methods for ancient inclusions and their applications. In summary, ancient inclusion research of western researchers is more focused on quantitative statistical analysis based on various component characteristics; methods for identifying the origins of inclusions have been established. By contrast, ancient inclusion research of Chinese scholars relies on qualitative judgment methods to establish inclusion-assisted methods for iron cultural relic process identification. How to enrich experimental analysis methods and extract more information from materials are two problems which need to be solved. In the future, modern metallurgical analysis methods could be used to understand the characteristics of inclusions in ancient iron and steel products from many aspects, laying a foundation to solve subsequent archaeological problems.