Modernizing monolithic systems through microservices architectures (MSAs) promises significant benefits in terms of scalability, agility, and cloud adoption. However, this transition hinges on accurate and efficient microservices identification, a complex area of research still in its evolution. This systematic literature review delves into this challenge by exploring three critical questions: First, we examine how the field of microservices identification has evolved over time, analyzing publication trends, categorizing existing research, and mapping out different research objectives and methodologies employed. Second, we dive into the current state-of-the-art, showcasing cutting-edge methodologies and tools developed to address microservices identification challenges. We highlight promising approaches while identifying potential limitations. Third, we unveil both existing hurdles and future challenges in this domain, painting a comprehensive picture of the obstacles and opportunities that lie ahead. Our findings illuminate key areas demanding further attention, including the need for more automated and accurate identification tools, standardized evaluation benchmarks, and a deeper understanding of the human factors involved in successful transitions. By addressing these critical gaps, we aim to pave the way for smoother and more effective modernization of monolithic systems through microservices adoption.INDEX TERMS Microservices, microservices architecture, microservices identification, monolith application decomposition, monolith to microservices migration.