The tunnels and urban underground projects have been a key part of infrastructure construction in China, and gradually develop toward deeper, larger, and longer. Complex geological conditions, as well as high ground stress, high ground temperature, high gas content, high water pressure, and other harsh operating conditions, are inevitably encountered during construction and efforts have been made to solve the problems of great construction difficulties, low efficiency, and frequent accidents. Based on the current situation of underground space development technology and equipment in China, the problems faced in this field are summarized. The development direction of tunnel and underground engineering construction and equipment in China is proposed. In order to cope with these problems, relevant suggestions are put forward: issue some policy documents on the demonstration and application of new tunnel construction equipment to promote technological innovation; rationally develop and utilize underground space, promote green construction and contribute to the carbon peak and neutrality target; develop intelligent technology for shield machines, so as to realize green operation and less manned or manless operation; accelerate the research on key technologies and major equipment to solve the bottleneck problems, developing new construction method and equipment for tunnel construction under complex geological environment and extreme working conditions, key technologies and major equipment for urban underground engineering.