This article presents a critical review of the theory and applications of a multiphase model in the community of the lattice Boltzmann method (LBM), the pseudopotential model proposed by Shan and Chen (1993) 4, which has been successfully applied to a wide range of multiphase flow problems during the past two decades. The first part of the review begins with a description of the LBM and the original pseudopotential model. The distinct features and the limitations of the original model are described in detail. Then various enhancements necessary to improve the pseudopotential model in terms of decreasing the spurious currents, obtaining high density/viscosity ratio, reducing thermodynamic inconsistency, unraveling the coupling between surface tension and equations of state (EOS), and unraveling the coupling between viscosity and surface tension, are reviewed. Then the fluid–solid interactions are presented and schemes to obtain different contact angles are discussed. The final section of this part focuses on the multi-component multiphase pseudopotential model. The second part of this review describes fruitful applications of this model to various multiphase flows. Coupling of this model with other models for more complicated multiple physicochemical processes are also introduced in this part.