Alginate oligosaccharides (AOS) are low molecular mass linear polymers containing 2–10 monosaccharides obtained by the degradation of alginate. They have various bioactivities including anti-inflammatory, antibacterial, antioxidant, antitumor, and immunomodulation. Thus, AOS have a wide range of applications in the fields of medicine, food, feed and agriculture. The bioactivity of AOS is closely related to its structure, including mode of degradation, degree of polymerization, ratio of mannuronic acid to guluronic acid, non-reducing end structure, and modification. Directed enzymatic degradation of alginate produces functional AOS with specific monomer composition and polymerization degree. Furthermore, the sources, properties and reaction conditions of enzymes affect the product distribution. In this article, the enzymatic preparation of functional AOS and its influential factors are systematically reviewed, and the structure-function relationship of functional AOS is discussed. It is expected that this review will provide a theoretical reference for the directed preparation and application of AOS.