Rechargeable batteries have gained a lot of interests due to rising trend of electric vehicles to control greenhouse gases emissions. Among all type of rechargeable batteries, lithium air battery (LAB) provides an optimal solution, owing to its high specific energy of 11,140 Wh/kg comparable to that of gasoline 12,700 Wh/kg. However, LABs are not widely commercialized yet due to the reactivity of the lithium anode with the components of ambient air such as moisture and carbon dioxide. To address this challenge, it is important to understand the effects of moisture on the electrochemical performance of LAB. In this review, the effects of ambient air on the electrochemical performance of LAB have been discussed. The literature on the deterioration in the battery capacity and cyclability due to operation in ambient environment and degradation of lithium anode due to exothermic reaction between lithium and water is reviewed and explained. The effects of using oxygen-selective membrane (OSM) to block moisture and $${\mathrm{CO}}_{2}$$
CO
2
contamination has also been discussed, along with suitable materials that can act as OSM. It is concluded that the utilization of OSM can not only make the safer operation of LAB in ambient air but could also enhance the electrochemical performance of LAB. Future direction of the research work required to address the associated challenges is also provided.