Strict emission regulations and demand for better fuel economy are driving forces for finding advanced engines that will be able to replace the conventional internal combustion engines in the near future. Homogeneous charge compression ignition (HCCI) engines use a different combustion technique; there are no spark plugs or injectors to assist the combustion. Instead, when the mixtures reach chemical activation energy, combustion auto-ignites in multiple spots. The main objective of this review paper is to study the engine performance and emission characteristics of HCCI engines operating in various conditions. Additionally, the impact of different fuels and additives on HCCI engine performance is also evaluated. The study also introduces a potential guideline to improve engine performance and emission characteristics. Compared to conventional compression ignition and spark ignition combustion methods, the HCCI combustion mode is noticeably faster and also provides better thermal efficiency. Although a wide range of fuels including alternative and renewable fuels can be used in the HCCI mode, there are some limitation/challenges, such as combustion limited operating range, phase control, high level of noise, cold start, preparation of homogeneous charge, etc. In conclusion, the HCCI combustion mode can be achieved in existing spark ignition (SI) engines with minor adjustments, and it results in lower oxides of nitrogen (NOx) and soot emissions, with practically a similar performance as that of SI combustion. Further improvements are required to permit extensive use of the HCCI mode in future.