Laser cladding (LC) is a laser-based surface modification technique widely adopted to develop a thin coating or remanufacture worn-out mechanical components that work in extreme conditions. LC helps to generate superior surface properties and surface integrity on the substrate surface, improving the service life. This review paper provides a comprehensive overview of the LC process, different powder feeding methods, and the uniqueness of LC over other coating techniques. More specifically, the current state-of-the-art of the LC process on carbon steel and high-alloy steel-based mechanical components operating in diverse industries was elucidated. Furthermore, the effect of LC processes on mechanical properties such as wear, corrosion and fatigue properties are discussed. In addition, the LC process’s influence on microstructural features and microstructural modifications is explained. Finally, this study explores some potential applications of the LC process in diverse industries.