Perovskite light‐emitting diodes (PeLEDs) can be a promising technology for next‐generation display and lighting applications due to their excellent optoelectronic properties. However, a systematical overview of luminescence and degradation mechanism of perovskite materials and PeLEDs is lacking. Therefore, it is crucial to fully understand these mechanisms and further improve device performances. In this work, the fundamental photophysical processes of perovskite materials, electroluminescence mechanism of PeLEDs including carrier kinetics and efficiency roll‐off as well as device degradation mechanism are discussed in detail. In addition, the strategies to improve device performances are summarized, including optimization of photoluminescence quantum yield, charge injection and recombination, and light outcoupling efficiency. It is hoped that this work can provide guidance for future development of PeLEDs and ultimately realize industrial applications.