-In this paper, the characterization, diversity, signaling, capacity and coding associated with fading channels are reviewed in an intuitive manner. We first introduce the basic concepts of fading and fading hannels with an adequate number of derivations and simulations, by which the effects of fading on wireless communication can be analyzed comprehensively. Then, we also give the performance analysis of signals propagating over flat and slow Rayleigh fading channel as an example. Specifically, the general form of error probability of received signal propagating over such a channel is presented and several special cases are discussed in depth with simulations. After this, we focus on diversity techniques, a powerful tool to overcome deep fading and improve the reliability of wireless communication. In addition, informationtheoretic issues, e.g. channel capacity, outage probability and coding based on fading channels are also expatiated. By reading this paper, the readers are expected to have a broad understanding of fading phenomenon, a variety of types of fading channels, effects of fading on wireless communication and the methodologies to overcome the disadvantageous effects. Meanwhile, we also point out the future potential research directions in the relevant fields.