Ultrasound contrast agent (UCA) reflers to the agent that has specific acoustic properties to enhance the contrast in ultrasound imaging by composition of gas-filled microbubbles with micrometer-diameters. In a diagnostic ultrasound field, microbubbles in fluid create an acoustic impedance mismatch between fluid and surrounding tissue to increase the reflection of sound and achieve a better contrast. Ongoing developments improve diagnostic possibilities of UCA remarkably, whereas their potential therapeutic applications have also been investigated for a couple of decades. The nonlinear response of UCA microbubbles has clinical reflevance from both diagnostic and therapeutic perspectives. The aim of this review is to introduce the latest reflearch progress of our group regarding the mechanism and applications of the nonlinear dynamic response to UCA, which include (1) an all-in-one solution characterizing coated bubble parameters with the help of the light scattering technique and flow cytometry, which makes it possible to quickly integrate the size distribution with dynamic motions of thousands of microbubbles and easily verify the validities of different shelled bubble dynamic models; (2) the development of a new bubble dynamics model that takes into account both nonlinear shell elasticity and viscosity, which can not only be capable of simulating the “compression-only” behavior of microbubbles excited by large amplitude ultrasound but also eliminate the dependence of bubble shell parameters on bubble size; (3) the estimation of UCA inertial cavitation thresholds of two types of commercial UCA microbubbles (viz., SonoVue microbubbles coated with lipid shells and KangRun microbubbles coated with albumin shells) and the evaluation of the relationship between microbubble inertial cavitation thresholds and their shell parameters; and (4) the reflearches of DNA transfection efficiency and the reduction of cytotoxicity in gene delivery facilitated by UCA excited by 1-MHz focused ultrasound pulses, and the results indicate that the measured DNA transfection efficiency and sonoporation pore size generally increase with the enhancement of inertial cavitation dose, while the cell viability decreases linearly with the increase of International Classification of Diseases (ICD). These studies are of significance for better understanding the mechanism of ultrasound-induced microbubble nonlinear dynamics and investigating the effective quantification technique for microbubble cavitation activity, which are important for further optimizing therapeutic ultrasound effects and avoiding the side-effects.