p97, also known as valosin-containing protein or CDC48, is a member of the AAA+ protein family that is highly conserved in eukaryotes. It binds to various cofactors in the body to perform its protein-unfolding function and participates in DNA repair, degradation of subcellular membrane proteins, and protein quality control pathways, among other processes. Its malfunction can lead to many diseases, such as inclusion body myopathy, associated with Paget’s disease of bone and/or frontotemporal dementia, amyotrophic lateral sclerosis disease, and others. In recent years, many small molecule inhibitors have been deployed against p97, including bis (diethyldithiocarbamate)-copper and CB-5083, which entered the first phase of clinical tests but failed. One bottleneck in the design of p97 drugs is that its molecular mechanism remains unclear. This paper summarizes recent studies on the molecular mechanisms of p97, which may lead to insight into how the next generation of small molecules targeting p97 can be designed.