By hybridizing or incorporating shape-memory materials with other functional materials or structural materials, smart composites can be fabricated which may utilize the unique functions or properties, of the individual bulk materials to achieve multiple responses and optimal properties, or, to tune their properties to adapt to environmental changes. A variety of shape-memory hybrid composites have been designed and manufactured, with shape-memory elements being either the matrix or the reinforcement. The hybrid composites provide tremendous potential for creating new paradigms for material-structural interactions and demonstrate varying success in many engineering applications. This review, from the standpoint of materials science, will give a state-of-the-art survey on the various shape-memory hybrid smart composites developed during the last decade. Emphasis is placed on the design, fabrication, characterization and performance of fibre-reinforced, particle-reinforced and multi-layered thin-film shape-memory composites.