Dry eye disease (DED) is a prevalent ophthalmic ailment with intricate pathogenesis and that occurs primarily due to various factors which affect the ocular surface. DED is characterized by the disruption of tear film homeostasis, inflammatory reaction, and neuroparesthesia. Transient receptor potential vanilloid 1 (TRPV1) is a versatile receptor that can be stimulated by heat, acid, capsaicin (CAP), hyperosmolarity, and numerous inflammatory agents. There is accumulating evidence that implicates TRPV1 in the initiation and progression of DED through its detection of hypertonic conditions and modulation of inflammatory pathways. In this article, we present a comprehensive review of the expression and function of the TRPV1 channel in tissues and cells associated with DED. In addition, we outline the potential mechanisms that implicate TRPV1 in the pathophysiology of DED. The aim of this review is to establish a theoretical basis for TRPV1 as a possible therapeutic target in DED, thereby encouraging further investigations into its role in DED.