Film fMRI has gained tremendous popularity in many areas of neuroscience. However, affective neuroscience is somewhat behind in embracing this new field, even though films especially lend themselves to the study of how brain function gives rise to complex, dynamic, and multivariate emotions. In this review, we discuss the unique capabilities of film fMRI for research on emotion, while also providing a general guide through the process of conducting such research. We start with a brief overview of emotion theories as these inform the choice of which type of film material and annotation features are appropriate. Next, we discuss the role of films as experimental paradigms for emotion elicitation and address the process of annotating them. We then situate movie-based fMRI in the context of resting state and task fMRI approaches, and present an overview of results from extant studies so far with regards to fMRI compliance, robustness of responses across participants, as well as the capabilities to distinguish idiosyncratic responses between participants. We also underscore that a key aspect for film fMRI is to deploy advanced and adequate data analysis. In particular, we focus on recent state-of-the-art analysis techniques including methods that probe neurodynamics. Finally, we convey the current limitations that come with film fMRI in the study of emotion. In sum, this review provides a practicioners' guide to the exciting and emerging research field of film fMRI and underscores how it can advance affective neuroscience.