Artificial cells, synthetic cells, or minimal cells are microengineered cell-like structures that mimic the biological functions of cells. Artificial cells are typically biological or polymeric membranes where biologically active components, including proteins, genes, and enzymes, are encapsulated. The goal of engineering artificial cells is to build a living cell with the least amount of parts and complexity. Artificial cells hold great potential for several applications, including membrane protein interactions, gene expression, biomaterials, and drug development. It is critical to generate robust, stable artificial cells using high throughput, easy-to-control, and flexible techniques. Recently, droplet-based microfluidic techniques have shown great potential for the synthesis of vesicles and artificial cells. Here, we summarized the recent advances in droplet-based microfluidic techniques for the fabrication of vesicles and artificial cells. We first reviewed the different types of droplet-based microfluidic devices, including flow-focusing, T-junction, and coflowing. Next, we discussed the formation of multi-compartmental vesicles and artificial cells based on droplet-based microfluidics. The applications of artificial cells for studying gene expression dynamics, artificial cell-cell communications, and mechanobiology are highlighted and discussed. Finally, the current challenges and future outlook of droplet-based microfluidic methods for engineering artificial cells are discussed. This review will provide insights into scientific research in synthetic biology, microfluidic devices, membrane interactions, and mechanobiology.