In our modern world, technological developments on the one hand, and global warming and its consequences, on the other hand, cause us to feel the necessity for reliable, cost-effective, and clean energy. Using renewable energy sources paired with compressed air energy storage can be a good option that meets these expected criteria. Although a compressed air energy storage system (CAES) is clean and relatively cost-effective with long service life, the currently operating plants are still struggling with their low round trip efficiencies. This paper illustrates an up-to-date review of compressed air energy storage systems containing changes in the conventional process to improve performance and increase efficiency. Three main categories of compressed air energy storage technology, diabatic, adiabatic, and isothermal, are analyzed theoretically. In addition, three components of a compressed air energy storage system including compression system, reservoirs, and expansion system are discussed here in detail. The advantages, disadvantages, and the technological readiness of different types of CAES are discussed.