Abstract: Intercropping is a production approach that can address the issues faced by modern agriculture, such as lowering green gas emissions and fossil material input, while also ensuring yields and system sustainability. The benefits of intercropping are primarily derived from the efficient use of time and space through interspecific interactions, formation of a root and canopy structure that is conducive to crop growth and resource efficiency, creation of an appropriate rhizosphere environment, and optimization of the physiological indicators of crop growth and development. Clarifying the photo-physiological mechanism of intercropping and its relationship with the canopy microenvironment will serve as crucial theoretical support for improving intercropping management technology and fully utilizing the advantages of intercropping. This study reviews the literatures on intercropping photosynthetic physiology at various levels, including populations, individuals, organs, cells, and molecules. Intercropping promotes the maintenance of photosynthetic sources and optimizes dry matter accumulation, distribution, and transportation at the population level; it increases the photosynthetic rate, chlorophyll content, and radiation use efficiency of tall crops but weakens the photosynthetic performance of short crops at the individual and organ levels. Additionally, the activities of phosphoenolpyruvate carboxykinase (PEPC) and Rubisco enzyme in tall crops are increased, whereas they are decreased in short crops; and intercropping tends to upregulate the expression of pepc and ppdk photosynthase genes in tall crops (maize) and upregulate genes encoding photoreaction centers in short crops (soybean). In terms of the intercropping canopy microenvironment, tall crops benefit from greater light interception and minimal temperature fluctuation. However, short crops experience deterioration in both light quantity and quality, lower canopy temperature, and higher humidity, which are unfavorable for crop growth. Regulatory approaches to promote the photo-physiology of intercropped crops and improve the canopy microenvironment include matching tall light-loving varieties and short shade-tolerant crop varieties, moderately increasing the row ratio of dwarf crops, and moderately increasing nitrogen and phosphorus fertilizers. Future research should explore the mechanisms at the microscale of intercropping using molecular biology techniques, discover growth laws and interspecies relationships of intercropping crops via growth model methods, breed special varieties to enhance interspecific interaction, and coordinate the spatial layout and group optimization theory appropriate for mechanization and interspecific interaction.