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Two-dimensional (2D) materials have attracted great attention in optoelectronics because of their unique structure, optical and electrical properties. Designing high-performance photodetectors and implementing their applications are eager to promote the development of 2D materials. Position-sensitive detector (PSD) is an optical inspection device for the precise measurements of position, distance, angle, and other relevant physical variables. It is a widely used component in the fields of tracking, aerospace, nanorobotics, and so forth. Essentially, PSD is also a photodetector based on the lateral photovoltaic effect (LPE). This article reviews recent progress in high-performance PSD based on 2D materials. The high-sensitive photodetectors and LPE involved in 2D photodetectors are firstly discussed. Then, we introduce the research progress of PSD based on 2D materials and analyze the carrier dynamics in different device structures. Finally, we summarize the functionalities and applications of PSD based on 2D materials, and highlight the challenges and opportunities in this research area.