Autonomous vehicles (AVs) must be thoroughly tested to ensure safety and reliability before marketing. Simulation‐based testing has gained widespread recognition as the essential approach for AV testing by providing sufficient testing scenarios in the virtual environment. Vehicle‐in‐the‐loop (VIL) simulation has the ability to perform comprehensive tests and validations for the AVs’ overall behaviors while keeping significant testing accuracy and efficiency through the combination of the virtual scenarios and the physical AV. This article provides an overview of representative studies on testbench‐based VIL simulation testing for AVs, mainly focusing on utilizing testbenches to simulate realistic road conditions, and using physical signal stimulation methods and related equipment to generate sensors’ physical signals. This article first summarizes current AV testing studies, identifying existing issues and flaws of the state‐of‐the‐art methods and tools. Afterward, the testbench‐based VIL is addressed around architecture, principles, advantages, and characteristics. Then, the road condition simulation and the sensor physical signal generation in VIL are discussed in depth from structure, principle, and corresponding advanced equipment. Finally, research gaps between cutting‐edge technologies and AV testing applications in industrialization are identified to facilitate future research in this direction.