Carbonated water injection (CWI) is a promising enhanced oil recovery (EOR) technique in which the dissolved CO2 can transfer to the oil phase to improve the oil mobility and to cause oil swelling, both enhancing the sweep efficiency. In addition to serving as an EOR method, CWI promotes a high storage capacity for geological CO2 storage. A number of laboratory tests and field applications have confirmed the effectiveness of CWI. This paper provides a comprehensive review of CWI to cover its important aspects/features such as displacement mechanisms and recovery performance at various conditions/properties. In this paper, carbonated water injection process and the properties of CO2-brine-oil systems are described. The influences of petrophysical properties, fluid properties, and operational parameters on the performance of CWI are also thoroughly addressed. The pore-scale investigations conducted by several researchers are reported in this review. The theoretical and practical challenges associated with the implementation of CWI are also discussed to unveil the fundamental mechanisms of transport phenomena in CWI. Some of the key points that are deduced from the previous theoretical and engineering works include: the exsolution of CO2 from carbonated water during pressure drop can provide additional energy for an extra oil recovery; detailed mathematical models capable of capturing the effects of dissolution, gravity, capillary pressure, and relative permeability hysteresis in 2-D and 3-D spatial orientation on the CWI performance have not been systematically developed yet; disparities between model results and experimental results are attributed to the instantaneous equilibrium assumptions in the model development; and the occurrence of asphaltene precipitation during CWI operations has not been highlighted in a majority of research works, while it is expected to happen during the CO2 exsolution due to the pressure decline.