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AbstractPurpose -The purpose of this paper is to investigate the related issues of physical annotation systems and also to study their historical development. Moreover, the paper provides a taxonomy of physical annotation systems, including augmented reality systems and concludes with future challenges concerning such systems. Design/methodology/approach -The authors first provide a review and a comparison of existing physical annotation systems. The authors' classification of the physical annotation systems is based on the capabilities they provide. Findings -Physical annotation systems evolve as technology progresses. However, there are issues such as cognitive overload, trust, transient associations, and integrating of social networking with physical annotations. Research limitations/implications -As technology develops, physical annotations will become increasingly important in daily life. Hence, there are important research issues to address with regards to physical annotation systems. Practical implications -New better physical annotation systems are needed, which will change the way we do things in life, including personal memory, tourism, commerce, security, games, traffic management, entertainment and health. Social implications -Physical annotation systems will affect the relationships between people, between people and places and between people and things. There is a potential shift in the way people view the physical world, not only as what we see but as what we see through the devices we carry. Originality/value -The paper is an original review of physical annotation systems; there does not seem to be many such reviews on this area. The paper presents a set of future challenges regarding such systems.