In urban areas, the transportation sector is one of the principal sources of substantial energy consumption and carbon emission. Although diesel and gasoline are still the main energy sources used in urban transportation, alternative and transitional energy sources have been introduced. The alternative and transitional energy sources include electricity (used in hybrid, electric, and fuel-cell vehicles), biofuels, gaseous fuels from other sources (hydrogen, natural gas, and liquefied petroleum gas [LPG]), alcohols, and ethers. Alternative and transitional energy sources can be used to promote the development of sustainable transportation systems because these sources are renewable and have a lower environmental impact than diesel and gasoline. However, various technical, economic, and policy factors can prevent the successful application of alternative energy sources. In this review, we summarize the latest literature regarding alternative and transitional energy sources in order to understand the current applications of these energy sources in urban transportation and their future applications.