Smart multifunctional V2O5 is an appealing oxide for energy-saving and energy-storage applications. This review article comprehensively analyzes its most recent advances and applications. The unique electronic structure of V2O5 with three bands triggers peculiar smart optical properties and multi-color appearance. The colors and optical characteristics of pristine V2O5 films are affected by the processing growth and conditions. The multi-chromism in V2O5 can be controlled by various external stimuli: applied voltage, electrochromic gas type, gasochromic; light source, photochromic; and temperature, thermochromic. Fundamental comprehension of chromism and “fixed-chromism” has been discussed. Chromism in V2O5 is reviewed, and the related advantages, drawbacks, and potential applications are emphasized with a focus on the fundamental aspects. General strategies to enhance the coloration performances of V2O5 chromogenic devices (CDs) are discussed. The role of the micro–nanostructural morphologies, growth conditions, doping elements, and hybrid composite structures on smart optical devices for improving the chromic performance is also addressed. The challenges that lie ahead of the commercialization of V2O5-based applied research are presented.