Phase change materials (PCMs) used for the storage of thermal energy as sensible and latent heat are an important class of modern materials which substantially contribute to the efficient use and conservation of waste heat and solar energy. The storage of latent heat provides a greater density of energy storage with a smaller temperature difference between storing and releasing heat than the sensible heat storage method. Many different groups of materials have been investigated during the technical evolution of PCMs, including inorganic systems (salt and salt hydrates), organic compounds such as paraffins or fatty acids and polymeric materials, e.g. poly(ethylene glycol). Historically, the relationships between the structure and the energy storage properties of a material have been studied to provide an understanding of the heat accumulation/emission mechanism governing the material's imparted energy storage characteristics. This paper reviews the present state of the art of PCMs for thermal energy storage applications and provides an insight into recent efforts to develop new PCMs with enhanced performance and safety. Specific attention is given to the improvement of thermal conductivity, encapsulation methods and shape stabilization procedures. In addition, the flame retarding properties and performance are discussed. The wide range of PCM applications in the construction, electronic, biomedical, textile and automotive industries is presented and future research directions are indicated.