The presented review will introduce the use of effect pigments as a powerful tool for the functionalization of textiles. This review starts with a short introduction on the basics of effect pigments and their properties. Subsequently, some principles of effect pigment application onto textiles and the interaction of pigment to binder systems are reported. Different possible functionalizations realized on textiles are presented. Four main types of application are discussed: optical properties, electrical properties, barrier coatings, and antimicrobial applications. Also a view of some prospective anisotropic materials is given. Altogether it is shown that the application of effect pigments can be a powerful tool to realize functional textiles for a broad range of applications in different fields.