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Discovered more than 30 years ago, the angiotensin AT₂ receptor (AT₂R) has evolved from a binding site with unknown function to a firmly established major effector within the protective arm of the renin-angiotensin system (RAS) and a target for new drugs in development. The AT₂R represents an endogenous protective mechanism that can be manipulated in the majority of preclinical models to alleviate lung, renal, cardiovascular, metabolic, cutaneous, and neural diseases as well as cancer. This article is a comprehensive review summarizing our current knowledge of the AT₂R, from its discovery to its position within the RAS and its overall functions. This is followed by an in-depth look at the characteristics of the AT₂R, including its structure, intracellular signaling, homo- and heterodimerization, and expression. AT₂R-selective ligands, from endogenous peptides to synthetic peptides and nonpeptide molecules that are used as research tools, are discussed. Finally, we summarize the known physiological roles of the AT₂R and its abundant protective effects in multiple experimental disease models and expound on AT₂R ligands that are undergoing development for clinical use. The present review highlights the controversial aspects and gaps in our knowledge of this receptor and illuminates future perspectives for AT₂R research.