Environmental problems, such as global warming and plastic pollution have forced researchers to investigate alternatives for conventional plastics. Poly(lactic acid) (PLA), one of the well-known eco-friendly biodegradables and biobased polyesters, has been studied extensively and is considered to be a promising substitute to petroleum-based polymers. This review gives an inclusive overview of the current research of lactic acid and lactide dimer techniques along with the production of PLA from its monomers. Melt polycondensation as well as ring opening polymerization techniques are discussed, and the effect of various catalysts and polymerization conditions is thoroughly presented. Reaction mechanisms are also reviewed. However, due to the competitive decomposition reactions, in the most cases low or medium molecular weight (MW) of PLA, not exceeding 20,000–50,000 g/mol, are prepared. For this reason, additional procedures such as solid state polycondensation (SSP) and chain extension (CE) reaching MW ranging from 80,000 up to 250,000 g/mol are extensively investigated here. Lastly, numerous practical applications of PLA in various fields of industry, technical challenges and limitations of PLA use as well as its future perspectives are also reported in this review.