This paper reviews the current status and advancement of Digital Twin-driven smart manufacturing, with highlights on the following aspects:•Presented the connotation of Digital Twin-driven smart manufacturing and its potential impacts.•Proposed a reference model for constructing a Digital Twin, comprising of an information model, data processing and industrial communication technologies.•Discussed seven crucial research issues for developing Digital Twin applications for smart manufacturing. This paper reviews the recent development of Digital Twin technologies in manufacturing systems and processes, to analyze the connotation, application scenarios, and research issues of Digital Twin-driven smart manufacturing in the context of Industry 4.0. To understand Digital Twin and its future potential in manufacturing, we summarized the definition and state-of-the-art development outcomes of Digital Twin. Existing technologies for developing a Digital Twin for smart manufacturing are reviewed under a Digital Twin reference model to systematize the development methodology for Digital Twin. Representative applications are reviewed with a focus on the alignment with the proposed reference model. Outstanding research issues of developing Digital Twins for smart manufacturing are identified at the end of the paper.