Fiber-reinforced composite materials are replacing metallic components due to their higher specific strength and stiffness. Automation and thermoplastics emerged to overcome the time and labor intensive manual techniques and the long curing cycles associated with processing thermoset-based composites. Thermoplastics are processed through fusion bonding which involves applying heat and pressure at the interface. Together with automated techniques (such as automated fiber placement, and automated tape laying), a fast, clean, out-of-autoclave, and automated process can be obtained. A detailed review of thermoplastic composites processing through automated methods is presented. It sheds the light on the materials used and the different heat sources incorporated with the pros and cons of each, with concentration mainly on hot gas torch, laser, and ultrasonic heating. A thorough illustration of the several mechanisms involved in a tow/tape placement process is tackled such as heat transfer, intimate contact development, molecular interdiffusion, void consolidation and growth, thermal degradation, crystallization, and so on. Few gaps and recommendations are included related to materials, laser heat source, heat transfer model, and the use of silicone rubber rollers. A review of optimization studies for tape placement processes is summarized including the main controllable variables and product quality parameters (or responses), with some of the major findings for laser and hot gas torch systems being presented. Both mechanical and physical characterizations are also reviewed including several testing techniques such as short beam shear, double cantilever beam, lap shear, wedge peel, differential scanning calorimetry, and so on. Challenges, however, still exist, such as achieving the autoclave-level mechanical properties and complying with the porosity levels required by the aerospace industry. More work is still necessary to overcome these challenges as well as increase the throughput of the process before it can be totally commercialized.