Aggregation-induced emission(AIE) molecules provide a promising way for the application and development of solid-state organic luminescent materials. However, the luminescent quantum efficiency of AIE in dilute solution is often limited by non-radiative decay caused by intramolecular motions. Constructing “confined environments” can effectively suppress their non-radiative decay pathways, thereby achieving luminescent enhancement. Currently, a variety of experimental methods have been developed to regulate luminescence through confined environments, with different underlying mechanisms, yet the underlying mechanism at the microscopic level remain unclear. This paper summarizes recent advances in multiscale theoretical simulations that elucidate the mechanisms of AIE luminescence enhancement in different confined environments. It systematically discusses how various confined environments, such as amorphous aggregation, (co-)crystallization, high pressure, host-guest inclusion, cell- membrane, and photochemical reactions, regulate molecular conformation, packing arrangements, electronic structures, and excited-state dynamics. The structure-property relationships among molecular structure, confined environment, and luminescent performance are clarified, providing a theoretical understanding of the microscopic origin of luminescence enhancement induced by confined environments. This work offers a theoretical foundation for the design and performance optimization of high-performance AIE materials, thereby promoting their applications in optoelectronics, bioimaging, and sensing.