Economic and social development of urban and rural areas continues in parallel with the increase of the human population, especially in developing countries, which leads to sustained expansion of impervious surface areas, particularly paved surfaces. The conversion of pervious surfaces to impervious surfaces significantly modifies local energy balance in urban areas and contributes to urban heat island (UHI) formation, mainly in densely developed cities. This paper represents a literature review on the causes and consequences of the UHI and potential measures that could be adopted to improve the urban microclimate. The primary focus is to discuss and summarise significant findings on the UHI phenomenon and its consequences, such as the impact on human thermal comfort and health, energy consumption, air pollution, and surface water quality deterioration. Regarding the measures to mitigate UHI, particular emphasis is given to the reflective and permeable pavements.