The development of silicon photonics provides a method of implementing high reliability and high precision for new micro-nano optical functional devices and system-on-chips. The asymmetric Fano resonance phenomenon caused by the mutual coupling of optical resonant cavities is extensively studied. The spectrum of Fano resonance has an asymmetric and sharp slope near the resonance wavelength. The wavelength range for tuning the transmission from zero to one is much narrow in Fano lineshape, therefore improving the figure of merits of power consumption, sensing sensitivity, and extinction ratio. The mechanism can significantly improve silicon-based optical switches, detectors, sensors, and optical non-reciprocal all-optical signal processing. Therefore, the mechanism and method of generating the Fano resonance, the applications of silicon-based photonic technology, and the physical meaning of the Fano formula’s parameters are discussed in detail. It can be concluded that the primary condition for creating the Fano resonance is that the dual-cavity coupling is a weak coupling, and the detuning of resonance frequency of the two cavities partly determines Fano resonance lineshapes. Furthermore, the electromagnetically induced transparency is generated when the frequency detuning is zero. The methods of generating Fano resonance by using different types of devices in silicon photonics (besides the two-dimensional photonic crystals) and the corresponding evolutions of Fano resonance are introduced and categorized, including simple photonic crystal nanobeam, micro-ring resonator cavity without sacrificing the compact footprint, micro-ring resonator coupling with other structures (mainly double micro-ring resonators), adjustable Mach-Zehnder interferometer, and others such as slit waveguide and self-coupling waveguide. Then, we explain the all-optical signal processing based on the Fano resonance phenomenon, and also discuss the differences among the design concepts of Fano resonance in optimizing optical switches, modulators, optical sensing, and optical non-reciprocity. Finally, the future development direction is discussed from the perspective of improving Fano resonance parameters. The topology structure can improve the robustness of the Fano resonance spectrum; the bound states in continuous mode can increase the slope of Fano spectrum; the Fano resonance can expand the bandwidth of resonance spectrum by combining other material systems besides silicon photonics; the multi-mode Fano resonances can enhance the capability of the spectral multiplexing; the reverse design methods can improve the performance of the device. We believe that this review can provide an excellent reference for researchers who are studying the silicon photonic devices.