Manipulating excitons in semiconductors has forged the evolution of today’s optoelectronic and photovoltaic devices. Engineering the dielectric constant, a key parameter that is highly associated with the Coulomb force of excitons, has recently emerged as a fresh avenue to regulate excitons from the root. Unlike three-dimensional (3D) bulk semiconductors featuring uniformly distributed dielectric constants, the dielectric constants of two-dimensional (2D) layered semiconductors exhibit spatial variability. Particularly, organic-inorganic hybrid perovskites (OIHPs) with alternatively assembled organic and inorganic layers show a cyclic variation in dielectric property, which substantially impacts exciton dynamics including recombination and separation, offering an opportunity to the regulation of exciton-related physical attributes by dielectric engineering and their cutting-edge applications thereof. This review documents the recent strides in the rational design of organic and inorganic constituents of 2D OIHPs for dielectric engineering. We show that dielectrically engineered OIHPs are pivotal in driving advancements in optoelectrical and photovoltaic applications.