Neurotechnology is facing an exponential growth in the recent decades. Neural electrode-tissue interface research has been well recognized as an instrumental component of neurotechnology development. While satisfactory long-term performance was demonstrated in some applications, such as cochlear implants and deep brain stimulators, more advanced neural electrode devices requiring higher resolution for single unit recording or microstimulation still face significant challenges in reliability and longevity. In this article, we review the most recent findings that contribute to our current understanding of the sources of poor reliability and longevity in neural recording or stimulation, including the material failure, biological tissue response and the interplay between the two. The newly developed characterization tools are introduced from electrophysiology models, molecular and biochemical analysis, material characterization to live imaging. The effective strategies that have been applied to improve the interface are also highlighted. Finally, we discuss the challenges and opportunities in improving the interface and achieving seamless integration between the implanted electrodes and neural tissue both anatomically and functionally.