Contemporary interior design has undergone significant transformation as a result of rapid technological advancement, particularly with the emergence of artificial intelligence and the Internet of Things (IoT). These technologies have contributed to redefining the nature and functions of interior spaces. Rather than being static physical environments, interior spaces are increasingly becoming intelligent, interactive settings capable of adapting to users’ needs and daily lifestyles, thereby enhancing comfort, functional efficiency, and the overall spatial experience. Smart systems integrated into lighting, air conditioning, furniture, and household appliances enable automatic or direct control of indoor environmental conditions according to usage patterns and individual preferences. Network-connected sensors can also help regulate energy consumption, improve lighting and ventilation, and strengthen security. This technological integration plays an important role in developing residential and commercial environments by creating flexible spaces that respond to users’ requirements and optimize the use of available areas. In interior planning, smart technologies have introduced innovative design solutions, including multifunctional and transformable furniture, intelligent storage systems, and interactive interfaces that improve spatial efficiency, particularly in small residential units and densely populated urban areas. Furthermore, operational data can provide insights into how spaces are used, helping designers refine furniture arrangements and interior layouts to achieve a balance between functional requirements and aesthetic considerations. Nevertheless, integrating technology into interior design presents challenges related to ergonomics, visual integration, and user privacy. Designers must ensure harmony between technological components and architectural elements while concealing cables, sensors, and communication systems in ways that preserve the visual integrity of the space. The psychological effects of continuous interaction with screens and smart devices must also be considered, while excessive automation should be avoided when it may reduce natural human interaction within interior environments. Personal data protection and digital security are also essential considerations in the design of smart environments, as some systems can collect information about users’ behavior and daily habits. Designers should therefore prioritize secure and transparent technological solutions that allow individuals to control their personal information and determine how their data is shared, while ensuring usability and accessibility for different user groups. In conclusion, smart technologies and the Internet of Things are influential forces in the evolution of contemporary interior design. They offer opportunities to improve functional performance, optimize spatial use, and enhance comfort and security. However, their successful integration depends on the interior designer’s ability to balance technological innovation with aesthetic values and human needs, ultimately creating flexible and sustainable interior spaces that respond effectively to the demands of modern life.