Real-time monitoring of the gastrointestinal tract in a safe and comfortable manner is valuable for the diagnosis and therapy of many diseases. Within this realm, our review captures the trends in ingestible capsule systems with a focus on hardware and software technologies used for capsule endoscopy and remote patient monitoring. We introduce the structure and functions of the gastrointestinal tract, and the FDA guidelines for ingestible wireless telemetric medical devices. We survey the advanced features incorporated in ingestible capsule systems, such as microrobotics, closed-loop feedback, physiological sensing, nerve stimulation, sampling and delivery, panoramic imaging with adaptive frame rates, and rapid reading software. Examples of experimental and commercialized capsule systems are presented with descriptions of their sensors, devices, and circuits for gastrointestinal health monitoring. We also show the recent research in biocompatible materials and batteries, edible electronics, and alternative energy sources for ingestible capsule systems. The results from clinical studies are discussed for the assessment of key performance indicators related to the safety and effectiveness of ingestible capsule procedures. Lastly, the present challenges and outlook are summarized with respect to the risks to health, clinical testing and approval process, and technology adoption.