Karrikins are small butenolide molecules with the capacity to promote germination and enhance seedling establishment. Generated abiotically from partial combustion of vegetation, karrikins are comparatively rare in the environment, but studying their mode of action has been most informative in revealing a new regulatory pathway for plant development that uses the karrikin perception machinery. Recent studies suggest that the karrikin receptor protein KAI2 and downstream transcriptional co-repressors in the SMXL family influence seed germination, seedling photomorphogenesis, root morphology, and responses to abiotic stress such as drought. Based on taxonomic distribution, this pathway is ubiquitous and likely to be evolutionarily ancient, originating prior to land plants. However, we still do not have a good grasp on how karrikins actually activate the receptor protein, and we have yet to discover the assumed endogenous ligand for KAI2 that karrikins are thought to mimic. This review covers recent progress in this field, as well as current gaps in our knowledge.