In recent years, the increasing level of CO₂ in the atmosphere has not only contributed to global warming but has also triggered considerable interest in photocatalytic reduction of CO₂. The reduction of CO₂ with H₂O using sunlight is an innovative way to solve the current growing environmental challenges. This paper reviews the basic principles of photocatalysis and photocatalytic CO₂ reduction, discusses the measures of the photocatalytic efficiency and summarizes current advances in the exploration of this technology using different types of semiconductor photocatalysts, such as TiO₂ and modified TiO₂, layered-perovskite Ag/ALa₄Ti₄O₁₅ (A = Ca, Ba, Sr), ferroelectric LiNbO₃, and plasmonic photocatalysts. Visible light harvesting, novel plasmonic photocatalysts offer potential solutions for some of the main drawbacks in this reduction process. Effective plasmonic photocatalysts that have shown reduction activities towards CO₂ with H₂O are highlighted here. Although this technology is still at an embryonic stage, further studies with standard theoretical and comprehensive format are suggested to develop photocatalysts with high production rates and selectivity. Based on the collected results, the immense prospects and opportunities that exist in this technique are also reviewed here.