Cell-to-cell variability in gene expression exists even in a homogeneous population of cells. Dissecting such cellular heterogeneity within a biological system is a prerequisite for understanding how a biological system is developed, homeo-statically regulated, and responds to external perturbations. Single-cell RNA sequencing (scRNA-seq) allows the quantitative and unbiased characterization of cellular heterogeneity by providing genome-wide molecular profiles from tens of thousands of individual cells. A major question in analyzing scRNA-seq data is how to account for the observed cell-to-cell variability. In this review, we provide an overview of scRNA-seq protocols, computational approaches for dissecting cellular heterogeneity, and future directions of single-cell transcriptomic analysis.