Universal concerns about harmful emissions, strict emission regulations and global warming have motivated research of engines operating with alternative combustion concepts. Low temperature combustion (LTC) is an advanced concept for internal combustion engines, which will be able to replace the conventional combustion modes and have the advantage of using renewable as well as traditional fuels. In this regard, LTC has attracted global attention in recent years, especially the homogeneous charge compression ignition (HCCI) mode. This combustion mode is different from spark ignition and compression ignition, because there is no flame propagation or diffusive flame. Instead, HCCI combustion is governed by chemical kinetics. HCCI engines use highly diluted homogeneous charge and when the mixture reaches chemical activation, auto ignition takes place simultaneously in multiple spots. HCCI technology allows high-efficiency operation compared with diesel engines, low emissions of nitrogen oxides, soot and particulate matters. However, controlling ignition timing, the inability of the high load operation, as well as increased unburned hydrocarbon and carbon monoxide emissions are the main challenges to overcome. This review covers the fundamental phenomena governing HCCI operation, its advantages, challenges and evolution. The mainly fundamental principles of the HCCI combustion concept were discussed in detail. The historical evolution of articles and patents were reviewed. Finally, detailed insights into the main challenges and possible solutions are also discussed.