A thermokarst lake is defined as a lake occupying a closed depression formed by ground settlement following thawing of ice-rich permafrost or the melting of massive ice. As it is the most visible morphologic landscape developed during the process of permafrost degradation, we reviewed recent literature on thermokarst studies, and summarized the main study topics as: development and temporal evolution, carbon release, and ecological and engineering influence of thermokarst lakes. The climate warming, forest fires, surface water pooling, geotectonic fault and anthropogenic activity are the main influencing factors that cause an increase of ground temperatures and melting of ice-rich permafrost, resulting in thermokarst lake formation. Normally a thermokarst lake develops in 3–5 stages from initiation to permafrost recovery. Geo-rectified aerial photographs and remote sensing images show that thermokarst lakes have been mainly experiencing the process of shrinkage or disappearance in most regions of the Arctic, while both lake numbers and areas on the Qinghai-Tibet Plateau have increased. Field studies and modeling indicates that carbon release from thermokarst lakes can feedback significantly to global warming, thus enhancing our understanding of the influences of thermokarst lakes on the ecological environment, and on regional groundwater through drainage. Based on field monitoring and numerical simulations, infrastructure stability can be affected by thermal erosion of nearby thermokarst lakes. This review was undertaken to enhance our understanding of thermokarst lakes, and providing references for future comprehensive studies on thermokarst lakes.