A promising strategy to mitigate both energy shortage and global warming is the conversion of CO2 into chemicals that can be used as fuels (chemical fuels) by utilizing renewable energy sources. Up to date, solar-driven CO2 reduction has been achieved with photochemical (PC) and photoelectrochemical (PEC) systems or electrochemical cells combined with a photovoltaic system (PV-EC). This study is intended to compare and highlight the state-of-the-art PEC systems for CO2 reduction and show the limitation factors that still hinder their widespread utilization. The review starts with a description of semiconducting photocatalyst properties and fundamental understanding of PEC CO2 reduction process. Then, the most significant performance metrics used for evaluation of PEC systems are explained in details. In addition, recent progress in PEC CO2 reduction systems is summarized and classified in different categories according to the chemical product. Different strategies such as doping, combination of two or more semiconductors, synthesis of nanostructured materials, passivation layers and co-catalysts that enhance light absorption, chemical stability, charge transfer and reduce ohmic losses and overpotentials of photoactive materials are reviewed. Besides the improvement of photocatalysts, research progress on the front of PEC reactor design, combined with the development of advanced modelling tools and characterization techniques are expected to bring PEC CO2 reduction a step closer to commercialization.